Our take on CXMT's 4F² announcement and implication to Samsung Electronics and SK Hynix

This report examines the 4F² cell architecture announced by Chinese DRAM maker CXMT and its plan to roll out a server-memory product based on it by end-2026, and assesses the implications for Samsung Electronics and SK Hynix. We argue that while the market may have underestimated CXMT's capacity ramp-up, it has likely overestimated the potential for a technology breakthrough: 4F² raises bit density by shrinking cell area without finer lithography, offering a route around EUV restrictions, but vertical transistors and wafer-to-wafer hybrid bonding increase process complexity, lower yields and raise costs. Korean players retain a significant lead in advanced nodes and HBM, and CXMT's expansion would still cover only part of China's domestic demand, leaving meaningful opportunities in China for SEC and Hynix. After the sharp share-price correction, both stocks trade below book value, implying the market is already pricing a downcycle by 2028 — more pessimistic than our "higher for longer"