Summary of Key Points
After Changxin Technology's listing on the STAR Market, its market value soared to the top of the A-share market (3.28 trillion yuan), creating what seems like a capital frenzy. However, ordinary people have little connection with this celebration: most are unable to participate in the new share offerings due to the high entry barriers of the STAR Market. The effort towards domestic substitution has not led to lower memory prices; instead, the surge in AI demand and the gap in advanced technology have caused memory prices to skyrocket, meaning consumers now have to pay an additional 1,000 yuan for computers and smartphones. The hidden costs of national strategic investments (taxes, policy-related purchases) are ultimately borne by the entire population. Moreover, Changxin still lags behind the three leading companies by two generations in the production of high-end HBM memory, indicating that significant breakthroughs in domestic substitution will take time.
1. New Share Offerings: A Frenzy for a Few
Changxin’s new share offering had one of the highest success rates on the STAR Market (0.47%), with a potential profit of 20,000 yuan per successful bid. However, this is not accessible to most people:
- Barriers to Entry: The STAR Market requires a daily average asset of 500,000 yuan for the past 20 days, while central bank data shows that the median financial assets of Chinese households are only 120,000 yuan, meaning over 90% of retail investors are ineligible to participate.
- Who Really Benefits: Although 9.42 million people applied, this represents less than 1% of China’s population of 1.4 billion. The real winners are early investors (such as Hefei state-owned assets, large funds, and Alibaba), who invested a few yuan or even just a few cents and have now seen their returns multiply by dozens of times. The 20,000 yuan won by retail investors is merely a drop in the bucket.
- Potential Profit vs. Actual Gain: Some sell their shares early for less, while others are too greedy to sell at all, resulting in losses. Only those who liquidate their shares in time can truly profit—yet most don’t even have the chance to buy them in the first place.
2. Domestic Substitution ≠ Lower Prices: Your Computer Might Be More Expensive
Many expect that domestic chips will lead to lower prices, but the opposite is true:
- Price Surges: The price of 16GB DDR5 memory has increased from 299 yuan to 699 yuan in half a year (a 134% increase), and industrial-grade memory has risen by 800%. HBM used in AI servers is even more expensive.
- Reasons for the Price Increase:
- Surging AI Demand: AI servers require 8–10 times more memory than regular servers; training GPT-4 consumes as much memory as dozens of thousands of computers, far exceeding production capacity.
- Changxin’s Insufficient Capacity: Changxin holds only a 7.67% global market share, and high-end HBM has not yet been mass-produced (with the three leading companies monopolizing this market). Domestic manufacturers are competing to buy domestic memory for supply chain security, driving up prices.
- Cost Shifting: Manufacturers pass on the increased costs to consumers through higher membership fees, more advertisements, and price increases—for example, the storage component of a computer might cost 1,000 yuan more.
3. The Hidden Costs of National Strategy: Who Pays for the 3 Trillion Yuan?
Changxin’s success did not come out of nowhere; it was achieved through collective effort:
- Government Investment: Hefei state-owned assets invested 14.4 billion yuan, and large funds invested 4.76 billion yuan. These funds came from the taxes of the people of Anhui and taxpayers nationwide (which could have been used to build schools and hospitals).
- Source of Equity Returns: Zhu Yiming exchanged no salary for 7 years in exchange for a market value of 75.3 billion yuan, while employee stock ownership platforms received 246.8 billion yuan, all from indirect contributions of stock market investors and consumers.
- Hidden Taxes: When you buy domestic smartphones or use cloud services, you are contributing to the research and development and production capacity expansion of domestic chips—this is the “tuition fee” necessary for industrial upgrading.
4. The Challenge of HBM: Changxin at the Table, but Not in the Elite Circle
Although Changxin ranks fourth globally, it still lags significantly in high-end technology:
- What is HBM: A crucial component for AI chips, with prices more than ten times that of regular DDR memory. The three leading companies (Samsung, SK Hynix, and Micron) control over 90% of the production capacity.
- Changxin’s Gap: While the three giants have already started mass-producing HBM4, Changxin is only testing HBM3 by the end of 2026, lagging by at least two generations. It will be difficult to catch up before 2030.
- An Embarrassing Situation: Changxin can produce mid-to-low-end memory but not the high-end HBM needed by AI, meaning it will continue to rely on foreign suppliers for essential components, and consumers will have to pay the price in the coming years.
Conclusion: The Cost is Temporary, but Dependency is a Permanent Pain
Changxin’s success represents a milestone in China’s domestic chip development, but the accompanying costs (price increases and hidden taxes) are inevitable. Spending an extra 1,000 yuan on a computer today ensures that we won’t be constrained by foreign companies in the future. More “Changxins” will emerge as part of this process, and although it is challenging, it is the necessary path for China’s technological rise. Ordinary people should understand the costs and the progress being made; supporting this transformation is the best way to support China’s scientific and technological advancement.