In short: Part of why China will overtake Korea in memory: "it is a national priority… as important as having a battleship or an aircraft carrier." "You had CXMT go public already… All of that will help them raise even more capital," with a captive market — China "consumes roughly 20% of the world's PCs and 20% of the world's smartphones."
CXMT is China's government-backed maker of DRAM, the working memory in phones, PCs and servers. It has already listed on the stock market, which lets it raise even more money to build factories.
Niles' point is that China doesn't need the most advanced chips to win share — Japan and Korea both entered memory behind the leaders and took over anyway. And China buys about 20% of the world's PCs and phones, so its chipmakers can grab at least that much of the market just by selling at home. That is the force he expects to crush today's 80% memory margins.
29:42And so with China, you had CXMT go public already. You're going to have YMTC go public shortly. All of that will help them raise even more capital. And they have a natural end market for this, too. Because don't forget, China consumes roughly 20% of the world's PCs and 20% of the world's smartphones. And so they can at least get to 20% share, no problem, and have a domestic market for all the chips they produce.
In short: The concrete China-memory threat, presented as fact rather than opinion: "CXMT, which is China's DRAM company, go public… CXMT plans on increasing their wafer starts from 300,000 to 500,000 by the end of next year… if you look at CXMT they have about 8% of the global DRAM market which is nothing, but it is ramping incredibly fast." And, the same day: "CXMT said they had produced a high bandwidth memory that was actually yielding very very well… this one's only a generation behind."
CXMT is China's state-backed DRAM maker — DRAM being the ordinary working memory in every phone, PC and server. It has just listed publicly, and the numbers Niles cites are the reason he is newly worried about the memory cycle: it plans to raise wafer starts (the industry's measure of factory throughput) from 300,000 to 500,000 a month by the end of next year, and it already has about 8% of the world DRAM market — small, but "ramping incredibly fast."
Quality is closing too. On the day of the interview, CXMT said it had produced high-bandwidth memory — the expensive kind that sits next to AI chips — "yielding very very well" and only about one generation behind the leaders. In his framing that is enough: a Ford does the job when you are not doing bleeding-edge work.
Why this matters to Western investors: the bull case for memory stocks rests on shortages lasting through 2030. If China hits its own published targets, that scarcity assumption breaks — and the stocks that look cheap only if the cycle is over would re-rate hard.
22:38Now don't forget you also had an internet buildout happening at the same time, but Korea entered that market and then by the 2000s you had the Japanese companies being driven out of business. What you had recently is CXMT, which is China's DRAM company, go public. And then YMTC, which is their NAND company, is going to go public very soon.
In short: Chinese DRAM maker with a ~$5B IPO coming — part of the wave of memory-fab capacity (with Micron, Samsung, YMTC) that sets up a coming oversupply.
51:047 trillion dollars, almost $2 trillion dollars a year. I don't think they're going to get anywhere near this because the economics are just not going to work and there's going to be excesses here as a result of this. So I agree that there will be a continuing buildout, but nowhere near the pace, and it could be a period of time where there's excess. Certainly, we're seeing in DRAM, Micron's talking about $250 billion dollars of capex spending. Okay, the Chinese are coming public, the CXMT,
In short: Referenced — China's DRAM champion, scaling fast with heavy state backing but trailing badly at the high end; "no real HBM threat in 2026." Standard DRAM is fungible and volume is how the gap could eventually close — the real pressure lands in 2027 and later. (Recap, not a stance call.)
In short: Referenced — China's memory maker scaling fast but still trailing at the high end (especially HBM); a long-run wildcard, "not the 2026 story." Watch whether it lands design wins at Western OEMs.
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