CXMT’s Hefei DRAM Plant Sparks Local Economic Growth

Chengxin Memory Technology’s DRAM manufacturing facility in Hefei, where the Chinese chip company is headquartered, has attracted a large number of highly educated engineers from across the country. This influx has significantly boosted the local economy and contributed to regional development.

Initially, workers had to travel about 35 kilometers to the city center to purchase daily necessities, as the plant was situated on the outskirts of Hefei’s core urban area. However, over the past two years, commercial centers, fast-food outlets, supermarkets, and hotels have emerged around the factory, reducing the inconvenience for employees, as observed during a recent visit.

The company, which recently gained approval to list on Shanghai’s Nasdaq-style STAR Market, started mass production at its Hefei plant in 2019—two years after breaking ground—and has been gradually expanding since then. The company also operates a factory in Beijing and began construction on a new facility in Shanghai’s Lingang area in March, expected to be operational by next year.

A nearby restaurant employee mentioned that “the restaurant is nearly full during meal times almost every day, with over 90% of the customers being company employees.”

The population surge has also spurred demand in the local rental market. For example, a 64-square-meter apartment in the nearby long-term rental complex “Vanke Boyu” now approaches prices similar to those in the city center. The apartment complex quickly reached full occupancy shortly after opening a year and a half ago, with a shortage of available units.

Lianjia’s local office manager Liu Qiang shared that at least four out of ten recent homebuyers through his agency were employees at the company.

Workers buying homes tend to be aged between 25 and 35, are highly educated, and possess strong purchasing power. Liu noted some earn over 70,000 CNY (approximately USD 10,300) monthly, with many earning between 30,000 and 40,000 CNY. Most hold master’s degrees or higher, and many are involved in research and development projects, Liu added.

The Lianjia office is roughly a 15-minute drive from the factory and serves as a key route to Hefei’s urban core. The area boasts a comprehensive array of amenities, including high-end housing developments, shopping malls, entertainment venues, and amusement parks.

Recently, a senior executive from the company rented a four-bedroom, two-living-room apartment for just CNY 6,500 (around USD 960) per month, with little negotiation, Liu noted.

Though the company provides workers with company housing and offers discounts for home purchases, the surrounding area continues to attract upstream and downstream supply chain companies, as well as service providers. This ongoing demand for rental properties is also driven by the local real estate market, according to an industry insider.

The ongoing industrial upgrades in Hefei have been transforming the city’s demographic makeup. Zhou Kaituo, general manager of CRIC Deep Consulting’s Purui Intelligent Research Center in Anhui province, explained that the city’s high-tech development zone is attracting more residents.

As emerging industrial clusters like integrated circuits grow, Hefei has experienced a net influx of approximately 530,000 people over the past three years, with over half under 35 years old. Zhou emphasized that this trend will likely continue, further fueling demand for premium housing.

Following its initial public offering, industry insiders predict Hefei’s real estate market will see a surge in demand for high-quality housing within the next one to two years.

The company plans to raise around CNY 29.5 billion (approximately USD 4.4 billion) via its IPO, primarily to upgrade DRAM technology, modernize existing manufacturing equipment, and develop next-generation storage solutions. This IPO will be the largest in mainland China in nearly four years, ranking as the 16th biggest overall and the second-largest on the STAR Market.