Montage: CXL deep dive - a new growth engine from DDR4 reuse

As highlighted in our memory interface chip primer, the rollout of agentic AI is creating significant incremental demand for CPUs and thereby server DRAM. However, DRAM supply shortages have become a key bottleneck facing hyperscalers, as new solutions to increase supply became increasingly urgent. Meta recently published a paper using Compute Express Link (CXL) Memory eXpander Controller (MXC) to reuse retiring DDR4. Our discussion with Montage also confirmed that local CSPs are developing similar solutions. We updated our company model and industry model to reflect this upside. We believe this could become a new growth engine for Montage, bring ~10% upside to their 2028 revenue, reiterate Outperform. We believe DDR4 reuse could become the first large-scale commercial application of CXL MXC. We estimate global CXL MXC TAM for DDR4 reuse could reach US$8bn by 2030E. Assuming Montage captures 50% market share in China and 10% market share in non-China, we estimate incremental revenue po