On July 27, 2026, when the gong sounded at the Shanghai Stock Exchange, the history of China's capital markets was rewritten.
A company making memory chips closed its first trading day with a market capitalization of 3.28 trillion yuan, surpassing Industrial and Commercial Bank of China (ICBC).
This was not a financial stock, not an energy giant, not an internet platform, but a manufacturing enterprise that extracts silicon from sand, etches circuits onto silicon wafers, and turns those circuits into memory chips.
Its headquarters are not in Shenzhen, not in Shanghai, not in Beijing.
It's in Hefei.
How did an inland city, mocked twenty years ago as "China's largest county seat," hatch the world's fourth-largest memory chip manufacturer? How did a company founded in 2016 surpass ICBC in market value just ten years later?
The more crucial question is: With such a large enterprise landing in Hefei, what has grown around it? How did sand transform step by step into chips? And who are the companies that became its neighbors?
Project 506
On May 6, 2016, a codename was born.
Zhu Yiming ("Lao Zhu"), then Chairman and General Manager of GigaDevice, sat down with Hefei city leaders to discuss building a DRAM project. This day later became known as "506," and the project was named "Project 506."
The backdrop was alarming: Samsung Electronics, SK Hynix, and Micron controlled over 95% of the global DRAM market, while mainland China had almost no large-scale DRAM manufacturing capability. The core technology in every memory stick inside every mobile phone, computer, and server worldwide was held by these three overseas giants.
Lao Zhu wanted to do this. But he couldn't do it alone. DRAM is a capital-intensive industry; a single 12-inch wafer production line requires investment of tens of billions, has extremely high technical barriers, and yield ramp-up cycles are measured in years.
Hefei made the decision.
In 2017, GigaDevice and Hefei Industry Investment formally signed a cooperation agreement. The initial project budget was 18 billion yuan, with GigaDevice contributing 3.6 billion yuan (20%) and Hefei Industry Investment contributing 14.4 billion yuan (80%).
And this was just Phase One. The total investment for the entire ChangXin Memory (CXMT) dynamic random-access memory chip base reached 150 billion yuan, making it Anhui's largest single industrial investment project at the time.
Why would Hefei invest so heavily?
The answer lies in a plan from three years earlier. In 2013, Hefei issued the "Integrated Circuit Industry Development Plan (2013–2020)," proposing for the first time to build a "Chinese Silicon Valley." CXMT was the most critical piece on this chessboard.
China's First Domestically Produced DRAM Chip
In September 2019, the CXMT 12-inch wafer fab began production.
What came off the production line that day was an 8GB DDR4 memory chip—a breakthrough from 0 to 1 for mainstream domestic DRAM chips.
From the project launch in May 2016 to the first product off the line in September 2019: three years and four months. During this period, CXMT completed "skip-generation R&D" from its first- to fourth-generation process technology platforms, achieving product coverage and iteration from DDR4 and LPDDR4X to DDR5 and LPDDR5/5X.
What does "skip-generation R&D" mean? Samsung and Hynix spent twenty years, generation by generation, progressing from DDR1 to DDR5, with three to five years between each generation. CXMT didn't have a twenty-year window; it had to skip intermediate generations and directly catch up to mainstream manufacturing processes.
After the first DDR4 chip came off the line in 2019, CXMT's products gradually iterated to DDR5 and LPDDR5/5X, which are the mainstream configurations for global AI servers and flagship smartphones today.
But technological breakthroughs don't equal profitability. The following years were far more difficult for CXMT than outsiders imagined.
From a 16.3 Billion Loss to Quarterly Profits of 24.7 Billion
The financial data of ChangXin Memory Technology (CXMT's listed entity) is like a roller coaster.
2023: Revenue of 9.087 billion yuan, net profit attributable to shareholders: a loss of 16.340 billion yuan.
2024: Net profit attributable to shareholders: a loss of 7.145 billion yuan.
But in 2025, the plot reversed. Annual revenue reached 61.799 billion yuan, a year-on-year increase of 155.62%; net profit attributable to shareholders was 1.875 billion yuan, achieving profitability for the first time. Non-GAAP net profit was 5.316 billion yuan, and gross profit margin from main business rose to 41.02%.
By the first quarter of 2026, the data exploded: Revenue of 50.8 billion yuan, up 719.13% year-on-year; net profit attributable to shareholders of 24.762 billion yuan, up 1688.30% year-on-year.
A single quarter's profit of 24.7 billion yuan covered the combined losses of 23.5 billion yuan from 2023 and 2024, with money left over.
The company forecast revenue for the first half of 2026 to be between 110 and 120 billion yuan, with net profit attributable to shareholders between 50 and 57 billion yuan. At this rate, annual net profit could exceed 100 billion yuan.
Why the explosion? Two reasons: First, AI is driving global DRAM supply shortages, with prices continuously rising. Second, CXMT's own capacity and yield ramp-up reached target levels, with capacity utilization reaching 95.73% in 2025.
Changes in global market share are even more telling. According to Counterpoint data, CXMT's global DRAM market share was 3% in Q1 2025, rising to 4% in Q2, 6% in Q3, and surging to 8% in Q4. More than doubling in a year. By Q1 2026, it stabilized at 8%, ranking fourth globally, following Samsung, SK Hynix, and Micron.
But CXMT's explosion is not a one-man show.
The Supporting Ecosystem from Sand to Chip
A DRAM chip goes from nothing to something through this process:
Silicon purification - Crystal pulling into silicon ingots - Slicing into silicon wafers - Photolithography - Etching - Thin-film deposition - Chemical mechanical polishing (CMP) - Cleaning - Dicing - Packaging - Testing - Finished product.
Each step requires specialized companies and equipment. CXMT handles the midstream wafer manufacturing, but without upstream equipment, materials, and downstream packaging and testing support, it would be an isolated island.
Hefei's industrial ecosystem precisely connects these islands into a continent.
In July 2026, a Securities Times reporter visited CXMT's core factory area and discovered an astonishing phenomenon: surrounding CXMT's facility were densely packed semiconductor equipment, materials, and testing companies, all providing nearby support.
Hefei Powertech Semiconductor, just across the road from CXMT, primarily provides packaging and testing services for CXMT's memory chips. With an investment of about 10 billion yuan, construction started in March 2021, formal production began in December of the same year. In May 2026, the company stated its Hefei packaging and testing plant was currently operating at full capacity and actively expanding based on customer demand.
The Xinqiao Integrated Circuit Technology Park is also adjacent to CXMT. This 172-acre park was planned simultaneously with CXMT's "Project 506" in 2016, opened in 2019, and has gathered over 20 semiconductor upstream and downstream enterprises.
Who's in the park?
Equipment: Hefei Naura Microelectronics Equipment Co., Ltd. (a subsidiary of Naura), providing key equipment like etching and thin-film deposition; Hefei Jingzhida Integrated Circuit Technology Co., Ltd. (under Jingzhida); ACM Research (Shanghai) has offices here; Kaiyue Semiconductor independently develops coater/developers, having upgraded from refurbishing imported second-hand equipment to independent innovation; Wanweikelin provides semiconductor equipment.
Packaging & Testing: Xinfeng Technology represents semiconductor packaging and testing projects.
Materials & Components: Hemeng Precision, Sanyue Vacuum provide semiconductor components and materials.
Supporting Services: Qichuan Technology, Huahai Qingke provide semiconductor supporting services.
Beyond this, across Hefei's broader landscape, there are even more supporting companies. Among upstream equipment suppliers, Naura, AMEC, Piotech, and Huahai Qingke already supply key equipment like etching, thin-film deposition, and CMP to CXMT.
In high-end materials: Yoke Technology supplies precursor products; Guanggang Gas, Jinhong Gas provide electronic specialty gases;彤程新材 (Red Avenue New Materials) and晶瑞电材 (Jingrui Electric Materials) have entered the photoresist supply chain.
The downstream client roster is equally impressive: Alibaba Cloud, Tencent, ByteDance, Lenovo, Xiaomi, Honor, OPPO.
In this IPO's strategic placement, semiconductor industry chain companies like AMEC and Piotech, as well as downstream enterprises like Xiaomi, TCL, Kuaishou, NIO, and Alibaba Cloud, all received allocated shares, creating deep ties through equity investment and business synergy.
According to incomplete statistics, CXMT involves over 30 A-share listed companies. Hefei's integrated circuit industry output value grew from about 18 billion yuan in 2016 to 151.4 billion yuan in 2025, an increase of over 7 times, with a CAGR exceeding 26%. The city now has over 400 integrated circuit enterprises.
This isn't one company; it's an entire industrial chain.
One Factory Ignites a Whole Street
CXMT's industrial ripple effect even extends to roadside snack stalls.
The CXMT factory area is located near Hefei Xinqiao Airport in the Changgang community. A Securities Times reporter's visit found the most bustling area around the factory is along Shuofang Road, jokingly called the "Changgang CBD" by locals.
Both sides of Shuofang Road are densely packed with restaurants, supermarkets, hotels, pharmacies, hair salons, entertainment venues, etc., some operating 24/7. The night market stays open until 2-3 AM. A skewer stall owner said at least half the business comes from CXMT employees or clients.
Even more exaggerated are the hotels. A Hampton by Hilton on Shuofang Road with over 170 rooms is basically fully booked on weekdays, with over 80% of guests traveling on CXMT business. Some long-term, high-frequency business clients directly book rooms for extended stays.
Frequent travel by CXMT's upstream and downstream clients creates severe accommodation shortages; not being able to book a room on weekdays is the norm.
A supplier's on-site personnel told the reporter he rented an apartment nearby, brought his wife and child, and had been stationed there for over half a year. At 10 PM, delivery vehicles were still coming and going on the Xinhua Avenue freight route. A truck driver from Beijing said one truckload of equipment was worth hundreds of millions of yuan.
South of the factory, the second-phase project of the 12-inch memory wafer manufacturing base is under construction through the night, with tower cranes operating and machines rumbling. The production lines run 24/7 without stopping.
The busyness of one factory area reflects the vibrancy of an entire industrial chain.
Hefei's Three Leaps
CXMT was not Hefei's first big gamble, nor its last.
Hefei's industrial rise has been summarized by outsiders as three leaps: Screen, Chip, Vehicle.
First Leap: Screen. In 2008, Hefei postponed subway construction, allocated about one-third of its local fiscal revenue to introduce BOE, which was losing over 1 billion yuan at the time, to build China's first 6th-generation LCD panel line. BOE later became China's panel leader, building multiple production lines in Hefei, driving the Xinzhan High-tech Zone's new display industry output value to exceed 120 billion yuan.
Hefei surpassed Shenzhen to top the list of China's top ten cities for new display industry.
Second Leap: Chip. Launching "Project 506" in 2016, CXMT landed. Hefei Industry Investment contributed 14.4 billion yuan, an 80% stake. Total investment of 150 billion yuan made it Anhui's largest single industrial investment project then.
Third Leap: Vehicle. In 2020, Hefei Construction Investment joined forces with three state-owned capital platforms to raise 7 billion yuan and introduce the nearly bankrupt NIO. After NIO China's headquarters settled in Hefei,整车龙头 (vehicle leaders) like BYD, Volkswagen, and supporting enterprises followed. In 2025, Hefei's new energy vehicle output reached 1.376 million units, ranking first among Chinese cities for two consecutive years, with industrial cluster revenue exceeding 600 billion yuan.
Three leaps pieced together Hefei's "Chip, Screen, Auto, Home Appliance, and AI" industrial skeleton, with chips, displays, automobiles, home appliances, and artificial intelligence supporting each other.
In 2025, Hefei's GDP reached 1.42 trillion yuan, ranking 18th nationally. Its GDP growth rate topped the list among China's top 20 cities by economic size in both 2024 and 2025. In Q1 2026, GDP was 322.96 billion yuan, a year-on-year increase of 6.8%, the highest growth rate among 29 cities with trillion-yuan GDP.
From a GDP of only 58.97 billion yuan in 2005, mocked as "China's largest county seat," to today's "Double Ten-Thousand City" (trillion-yuan GDP, ten-million population), Hefei took twenty years, advancing 70 places in ranking.
Is Hefei Suitable for Employment and Living?
After CXMT's listing, a practical question was repeatedly raised: Is Hefei a city suitable for ordinary people to work and live in?
First, employment.
Hefei plans to create 200,000 job positions in key industry sectors in 2026. Since 2023, it holds an annual "Hefei Invites You, 200,000 Positions for You to Choose" series of job fairs, facilitating 278,000 employment intentions over three years. It attracts over 350,000 university graduates annually.
Regarding salaries, semiconductor technicians who moved from Shanghai to Hefei reported salaries decreased by only about 10%, but job stability is stronger, with far less risk of mid-career unemployment compared to first-tier cities.
Now, cost of living.
In June 2026, the average price for new homes in Hefei was about 17,900 yuan/m2. By district: Zhengwu District averaged 31,767 yuan/m2, the city's highest; Binhu District 24,405 yuan/m2; High-tech Zone 24,373 yuan/m2; Economic Development Zone 23,678 yuan/m2; Baohe District 23,084 yuan/m2. Outlying areas ranged from 7,000-8,000 yuan/m2.
Compared to the Yangtze River Delta: Nanjing's average new home price is around 30,000+; Hangzhou 35,000+. Hefei is only half to two-thirds of those. The house price-to-income ratio is about 10.2, not low, but far lower than first-tier cities' 15-20.
For commute, the average commute within Hefei's urban area is 38 minutes, nearly a quarter-hour less than the 45-50 minutes in Beijing, Shanghai, Guangzhou, and Shenzhen. A resident who returned from Beijing said: "My income in Hefei is similar to what it was in Beijing, but my happiness is much higher. No need to squeeze onto subways, it's 20-30 minutes to get anywhere, and things are cheaper."
Education and healthcare are also upgrading. In 2026, Hefei plans to newly build, renovate, or expand 43 primary/secondary schools and kindergartens, adding 38,000 new student places, aiming to increase the普通高中 (普通高中) admission rate to 85%. The Hefei Public Health Clinical Medical Center will open for operation, 5 smart hospitals will be completed, 5 national regional medical centers will be enhanced, and 20 new名医工作室 (renowned doctor studios) will be established.
Consumer-wise: Sam's Club's first Anhui store opened in Hefei in April 2025, with over 50,000 member registrations on opening day. Aldi is即将落地 (soon to land).高端户外品牌 (High-end outdoor brands) like Arc'teryx and Salomon have achieved布局密度 (distribution density) in Hefei comparable to Suzhou and Wuxi. Non-standard commercial streets like新粮仓 (New Granary) and瑶海天地 (Yaohai Tiandi) are called "Hefei's新天地 (Xintiandi)."
Annually, about 30% of University of Science and Technology of China (USTC) graduates choose to stay in Hefei to start businesses or work. Among Hefei's STAR Market-listed companies, USTC-affiliated enterprises account for over 30%; among unicorn companies, USTC-affiliated enterprises account for over 40%.
...
From sand to chips, from county seat to trillion-yuan city, this road took Hefei twenty years.
Turning sand into chips requires over a thousand processes. Turning a county seat into a trillion-yuan city requires twenty years of staying the course.
This requires extreme long-termism and the ability to endure solitude.
This article is from the WeChat public account "Washu66" (ID: washu66), author: Washu
