Since 2020, China has gone from irrelevant in the memory-chip business to holding 5% of the global market, and it has done so in the teeth of ever-tightening restrictions from the United States.

That surge was made possible by the explosion of ChangXin Memory Technologies (CXMT), now the world’s fourth-largest maker of DRAM (dynamic random-access memory) chips, and by what many call the «Hefei model»: the decision by the city’s administration to lure technology companies with cheap land, tax breaks and a lean, fast bureaucracy.

The model has plainly worked. Today Hefei is regarded almost as an investment fund in its own right, one where the city administration itself is a leading player, always ready to pour billions into the most innovative and «risky» technologies.

The Chinese Silicon Valley

Hefei has turned itself into the «Silicon Valley» of the People’s Republic thanks to an economic model unlike any other, one in which state investment, the University of Science and Technology of China (USTC) and the country’s largest tech companies all coexist.

It is a strategy in which the local government acts as a genuine venture-capital fund, attracting key industries, building local supply chains and making the most of the talent pouring out of the university.

A decade-long climb

One of the main engines of Hefei’s growth is CXMT, founded in 2016 and, in barely ten years, one of the world’s top producers of DRAM, the dynamic random-access memory chips now used in cars, consumer electronics and the servers that power artificial intelligence.

In financial terms, many industry insiders are calling it a miracle. CXMT was China’s answer to the US restrictions that barred the country from buying powerful HBM (high-bandwidth memory) chips, and it quickly established itself as a global leader: in the first three months of this year its revenue topped €6.4 billion (about $6.9 billion), and the full-year forecast calls for 700% growth over its already strong 2025 figures.

The stock-market boom

What made China, and the city of Hefei that hosts CXMT, richer still was the chipmaker’s recent stock-market debut on the Shanghai exchange.

On the morning of the listing the shares jumped 472%, and by early afternoon they were still up 462%. Those numbers made CXMT the most valuable group listed on mainland China’s exchanges, with an estimated market capitalization of roughly €415 billion (about $448 billion).

A remarkable deal for the city. According to local press, investment platforms run by the Hefei municipal government hold around 45% of CXMT’s shares, a stake whose value jumped in a matter of hours from $1 billion (€880 million) to $140 billion (about €123 billion).

Editor’s note

This article was originally published in Italian on money.it by Andrea Fabbri on August 01, 2026 as «Il boom di CXMT ha reso ricchissima la città cinese di Hefei». It has been translated and adapted for an international audience by the Money.it International desk.