After a decade of collaboration, trillions in returns! Unveiling the biggest winner of ChangXin Memory Technologies' listing—Hefei

Original Author: Xu Chao

Original Source: Wall Street CN

A single city gambled on an "impossible" project, endured a decade of consecutive losses, burned through 36.6 billion yuan, and eventually reaped trillions in returns — this is not fiction, this is Hefei.

On July 27, 2026, Changxin Technology (688825) officially listed on the STAR Market, closing at 49 yuan, surging 465.82% from its IPO price. Its market capitalization surpassed 3.2 trillion yuan, overtaking ICBC to become the "most valuable stock" on the A-share market. This largest Chinese DRAM manufacturer, and the fourth largest globally, stood in the capital market spotlight exactly ten years after its founding.

And the city that stood behind this enterprise, steadfastly supporting it for a decade, is now quietly cashing in on a historic bill. Based on an estimated 36.79% shareholding by Hefei's state-owned assets system, the corresponding book value exceeds 1.2 trillion yuan. Fueled by the massive market cap increase from Changxin Technology alone, the total A-share market value of Hefei's listed companies surpassed 4 trillion yuan, making it the second-largest city by A-share market cap in the Yangtze River Delta — a "high-stakes gamble" by a central provincial capital that has written the most stunning footnote in the history of China's industrial investment.

One Man's Two-Decade Dedication

To understand why Hefei dared to invest, one must first understand the man, Zhu Yiming.

Zhu Yiming, a native of Yancheng, Jiangsu, was admitted to Tsinghua University in 1989. After earning his master's degree, he went to the US for further study, transitioning into the semiconductor field at Stony Brook University. After graduation, he entered Silicon Valley, serving as a project manager at a memory chip company.

There, he saw an alarming truth: memory chips are the semiconductor category with the highest consumption and highest degree of standardization. They are the "food" for almost all electronic devices. But on this track, Chinese players were chronically absent.

In 2004, he made a life-changing decision — resigning to return to China and start a business. The initial capital was $920,000, pooled together by several Tsinghua alumni. After the 2005 Spring Festival, in a two-story bare-bones office at Tsinghua Science Park, he founded what would later become Gigadevice. Instead of directly challenging giants like Samsung and SK Hynix, he targeted the NOR Flash niche market, completing the initial accumulation. In 2016, Gigadevice successfully went public.

But Zhu Yiming's ambition extended far beyond that. He once said, "If a computer is likened to a crown, the CPU is the jewel on the crown, and memory is the crown's base." "Whoever leads memory technology will dominate the entire integrated circuit industry."

Creating a Chinese version of "Samsung Electronics" was his ultimate goal, unchanged since day one of his entrepreneurial journey.

And in 2016, the opportunity arrived.

A "Lost Cause" No One Dared Touch, Hefei Took It On

At that time, 96% of the global DRAM market was firmly controlled by the three giants — Samsung, SK Hynix, and Micron. China's autonomous production capacity was virtually zero. The DRAM industry demands immense capital, talent, and technology, and its strong cyclical nature causes product prices to fluctuate wildly. Losses were almost an inevitable "entry fee."

Hefei, at that point, was not particularly wealthy to begin with. But Hefei made its decision — to go ahead.

This became the strategic project later codenamed "506": the Changxin 12-inch memory wafer manufacturing base with a total investment of approximately 150 billion yuan. The first phase alone required a total investment of 18 billion yuan, with Hefei Industry Investment Group contributing 14.4 billion yuan, an 80% stake. For Hefei in 2016, this was virtually throwing everything they had into the pot.

Even more commendable is that Hefei chose to be a "true long-term partner."

During Changxin Technology's darkest hours of consecutive losses, accumulating a deficit of over 36.6 billion yuan, Hefei's state-owned capital did not flinch or withdraw. Even at the end of 2024, when other investors exited, Hefei proactively spent nearly 2 billion yuan to take over their shares. A spokesperson for Hefei Industry Investment Group once explained the underlying logic in plain terms:

For weak links in industry chains like chips, the probability of achieving short-term capital returns is very small. It requires large capital, long cycles, and even spanning multiple cycles to ultimately realize value investment.

This was not a gamble, but a city's deep understanding of industrial cycles and a clear judgment of national strategic needs.

China's DRAM from Zero to One: A Perilous Journey

The path Changxin walked was far more treacherous than outsiders imagined.

Fujian Jinhua, established around the same time as Changxin, had its project halted on the eve of mass production after being sued by Micron for allegedly stealing trade secrets. Changxin chose a different path — through legal negotiations, it acquired implementation licenses for over 10 million DRAM technical documents, 2.8TB of core data, and a large number of Infineon DRAM technology patents from the bankrupt German memory giant Qimonda, at a cost of "several hundred million dollars."

In 2018, Zhu Yiming made a decision that stunned the capital market: he resigned as General Manager of Gigadevice to become the full-time Chairman and CEO of Changxin Technology, vowing to take no salary or bonuses until the project turned profitable.

A year later, in September 2019, Changxin Technology launched its self-designed and produced 8Gb DDR4 chip, marking the historic "zero-to-one" breakthrough for mainland China's DRAM industry.

But "zero-to-one" was merely an entry ticket. The real test came in 2023.

That year, global DRAM prices plummeted over 40%, smartphone and PC shipments declined, and the industry entered a deep cyclical downturn. Leveraging their cost advantages, the three giants employed a "counter-cyclical" strategy, maintaining high shipment volumes to further squeeze new entrants.

Changxin lost money on every chip sold, yet it still pushed forward with massive losses to accelerate the 1x nanometer process and breach key technical barriers for DDR5 mass production. The company posted a net loss of 16.34 billion yuan that year, a record high since its founding, bringing its cumulative deficit over ten years to 36.65 billion yuan.

Any commercial entity, faced with this track record, would have cut its losses and run.

But Hefei did not. During Changxin's darkest years of consecutive losses, Hefei's state-owned capital chose again and again to increase investment, provide resources, and supply ammunition.

In that very year, the Standing Committee of the Hefei Municipal People's Congress reviewed and approved a capital increase and expansion plan. At the end of 2024, when Country Garden Ventures exited, Hefei's municipal state-owned capital platform spent nearly 2 billion yuan to take over their old shares, without any hesitation.

Behind this lies an institutionalized fault-tolerant mechanism constructed by Hefei: projects must be reviewed by the Finance and Economy Committee of the Municipal People's Congress for inclusion in the library; major decisions must be voted on by the Standing Committee. As long as due diligence is compliant and procedures are followed, decision-makers bear no personal responsibility even if the project ends up in losses. It is reported that Hefei has never disciplined any individual or unit for failed industrial investments.

It is this institutional guarantee of being "able to afford losses" that allowed Hefei to become genuine patient capital while other cities hesitated.

Earning 400 Million a Day, Filling a Decade's Deficit in One Quarter

The turning point arrived quietly in 2025.

Demand from AI computing power fully ignited a super cycle for memory. A single AI server requires 3 to 5 times the DRAM of a traditional server. As Samsung, SK Hynix, and Micron shifted their capacity towards higher-margin HBM, the supply gap for conventional DRAM widened significantly.

Changxin Technology had just completed its product iteration from DDR4 to DDR5, with the capacity utilization rate of its three 12-inch wafer fabs steadily increasing from 85% to 95%. Surging demand, contracting supply, and expanding capacity — a textbook "Davis Double Play" triggered by these three positive factors.

In 2025, Changxin Technology achieved its first annual profit, with a net profit attributable to the parent company of 1.875 billion yuan.

In the first quarter of 2026, its revenue reached 50.8 billion yuan, and net profit attributable to the parent company hit 24.762 billion yuan, a year-on-year increase of 1688%. This translates to nearly 400 million yuan in daily profit. At this pace, in less than half a year, Changxin has almost filled all the deficits accumulated over the previous ten years.

At this moment, Hefei's "first bet" of 14.4 billion yuan, along with a decade of subsequent continuous investment, finally realized its value.

Beyond a Trillion in Paper Gains: A City's Industrial Transformation

The 1 trillion yuan on the books is just the tip of the iceberg for Hefei's returns.

Ten years ago, the site of the Changxin fab in Hefei's northwestern suburbs was farmland and wasteland. Now, vast gray-white factory buildings stretch for hundreds of meters, with dense silver air ducts, walkways, and industrial pipes intertwining overhead. Outside the factory complex, R&D buildings, employee dormitories, canteens, commercial centers, fast-food outlets, and supermarkets have opened one after another, colloquially dubbed "Changgang CBD."

By the end of 2025, Changxin Technology's total workforce reached 19,300, including over 6,000 R&D personnel, mostly aged between 25 and 35, with the majority holding master's degrees or higher. These young, highly educated, high-earning employees are fundamentally reshaping the consumption patterns and urban character of the surrounding area.

The changes at the industrial chain level are even more profound.

Leveraging the leading effect of Changxin Technology, Hefei has attracted over 450 integrated circuit companies, forming a complete industrial chain from design and manufacturing to packaging and testing, making it one of the few cities in China with a full IC industry chain. In 2016, the output value of Hefei's IC industrial chain was only about 18 billion yuan; by 2025, this figure had reached 151.4 billion yuan, a 7.4-fold increase.

Even more noteworthy is the industrial synergy effect. Changxin's memory chips, together with BOE's display panels and the new energy vehicles from NIO and BYD, constitute Hefei's "chip-display-car-integration" industrial landmark, forming a deeply interlocked and mutually reinforcing industrial ecosystem. For example, Jinghe Integration manufactures panel display driver ICs for BOE, and Jiefa Technology supplies automotive-grade MCUs to BYD and NIO. The internal cycle of the industrial chain is accelerating.

The "Hefei Model": Why Others Can't Replicate It

Following the listing of Changxin Technology, attention has again turned to the "Hefei Model." In fact, about 50 delegations visit Hefei each month, producing millions of words in research reports, yet no truly replicable template has ever emerged.

Hefei itself articulates it clearly: this model has four prerequisites, all of which are indispensable.

Sufficient financial resources. In 2008, Hefei invested 6 billion yuan in BOE, an amount equivalent to 20% of its fiscal revenue for that year. The Changxin project endured the pressure of a cumulative 36.6 billion yuan in losses over ten years. Without the necessary fiscal maneuvering space, this problem simply couldn't be solved.

A robust fault-tolerant mechanism. Hefei was among the first in the country to establish a "due diligence exemption" system. As long as project decisions follow procedures and adequate due diligence is performed, decision-makers bear no personal liability even in cases of loss. The city has never disciplined any individual or unit for failed investments — this is the institutional backbone for "daring to invest."

Accurate industrial judgment. Every time Hefei made a move, it was during the industry's coldest moments — BOE during the global panel industry's massive losses; NIO when its stock price dropped to $1 and 18 other cities rejected it; Changxin when no Chinese player existed in the global DRAM market. This counter-cyclical deployment relies on years of systematic research into industrial trends, not on chasing the latest fad.

A wide policy window. Hefei benefited from China's golden decade of manufacturing moving from low-end to mid-to-high-end, where the need for domestic substitution was real and urgent. As the Song Xuetao team from Guojin Securities pointed out, Changxin "caught" the triple waves of domestic substitution, memory security, and AI demand expansion, which itself underscores the foresight of national strategic planning.

A Paradigm Shift in Chinese Urban Development

Behind the listing of Changxin Technology, a broader proposition is emerging: beyond land finance, cities need a new engine for development.

Hefei's path offers one answer: use state capital for early-stage investment, then leverage the capital market for amplification to build a system capable of continuously producing good companies. During the property boom from 2015 to 2021, Hefei's total land sales revenue was approximately 551.6 billion yuan. In comparison, the book value of Hefei's state-owned stake in just Changxin Technology alone has already approached 1 trillion yuan.

This is not just Hefei's story; it represents an ongoing paradigm shift in the logic of Chinese urban competition: from "attracting investment" to "nurturing industries," from "land finance" to "equity finance," from "transplanting a big tree" to "growing an entire forest."

The listing gong of Changxin Technology is Hefei's final answer after a decade of patient capital, and an unavoidable exam question for many other cities.