Bernstein has released an in-depth report on Montage Tech (06809), maintaining its Outperform rating and raising the A-share target price to RMB400 while setting the H-share target price at HK$520.
The report argues that as AI applications evolve from single-turn Q&A to agent-based models that continuously execute tasks, demand for server CPUs, memory configurations, and high-speed interface chips will rise in tandem. Montage Tech is well-positioned to benefit from two key growth drivers: MRDIMM upgrades and CXL memory expansion.
The core logic behind Bernstein's bullish stance is not that AI computing will shift from GPUs to CPUs, but rather that intelligent agents bring more work that accompanies model inference. When an agent completes a task, it often needs to retrieve information, call databases, run code, operate browsers, and save session states. Accelerator host CPUs need to handle data supply and scheduling, sandbox CPUs handle tool execution, and general-purpose server CPUs process retrieval, databases, and enterprise applications. As these tasks increase, both CPU core counts and memory requirements will rise.
The report notes that when CPU computing power improves, if memory cannot supply data in time, the efficiency of the additional computing power and expensive GPUs may be constrained. For cloud providers, as long as increasing CPU and memory configurations can boost the effective output of the entire cluster, there is a sustained investment incentive. HBM continues to serve high-bandwidth accelerator computing, while local DDR mainly handles frequently accessed data by CPUs, and both types of demand can grow in parallel.
For market sizing, Bernstein adopts a framework of "server CPU shipments multiplied by DIMMs per CPU multiplied by value per memory interface chip." The report estimates that excluding Nvidia's own CPUs, global server CPU shipments will grow from approximately 30.6 million units in 2025 to approximately 89.3 million units in 2030; the average number of memory modules per CPU will rise from about 9 to 13.6; and the average value of interface chips per memory module will increase from about US$5.9 to US$16.3. Combining these three factors, the global DDR memory module chipset market is expected to expand from approximately US$1.6 billion in 2025 to approximately US$20 billion in 2030, representing a compound annual growth rate of about 65%. Bernstein also cautions that this figure represents the total industry opportunity and does not equate to revenue that Montage Tech can capture, as actual realization still depends on customer configurations, product penetration rates, and the company's market share.
MRDIMM is viewed as the key to growth elasticity in Montage Tech's core business. Compared to traditional RDIMM, which typically calls one Rank at a time, MRDIMM can use dedicated interface chips such as MRCD and MDB to enable two Ranks to supply data in parallel, significantly increasing the memory bandwidth available on the CPU side. According to the report's estimates, the chip value associated with standard DDR5 RDIMM is approximately US$6 to US$7, while the chip value associated with MRDIMM can reach US$50 to US$70. Bernstein expects that by 2030, MRDIMM will account for approximately 25% of server DDR memory module shipments, with its MRCD and MDB products contributing a significant proportion of market value. For Montage Tech, this means the company's growth does not solely depend on increasing server volumes but will also benefit from rising value per memory interface chip. However, MRDIMM is more suitable for applications with intensive memory requests and bandwidth approaching saturation, and still requires certification across CPUs, motherboards, firmware, thermal management, and complete systems, with its penetration speed still subject to verification through actual customer deployments.
Beyond MRDIMM, CXL memory expansion is another new opportunity that Bernstein favors. Montage Tech already has products supporting CXL 2.0, PCIe 5.0, and DDR4 and DDR5. CXL can help next-generation servers reuse some DDR4 memory to expand capacity at lower cost, making it suitable for storing waiting agent environments, infrequently accessed vector data, and caches. The report estimates that under specific price assumptions, the cost of 128GB native DDR5 is approximately US$3,500, while a solution reusing DDR4 with a controller and expansion card costs approximately US$920. Bernstein expects the DDR4 reuse-related CXL controller market to grow from approximately US$180 million in 2027 to approximately US$8.2 billion in 2030, with the total CXL chip market size potentially approaching US$9.9 billion.
The competitive landscape is also an important support for Montage Tech's high valuation. Data cited in the report shows that Montage Tech, Renesas, and Rambus together account for more than 90% of the global core memory interface chip market, with Montage Tech holding approximately a 37% share. The industry typically requires 18 to 24 months from chip design to customer certification and mass production introduction, with long-term validation and stable supply capabilities constituting high barriers to entry.
In terms of valuation, Bernstein expects Montage Tech's earnings per share to be RMB3.44 and RMB5.69 for 2026 and 2027, respectively. The report believes that the RMB400 target price reflects the earnings potential of the MRDIMM and CXL product cycles from 2027 to 2028. Going forward, MRDIMM customer certification and mass shipments, CXL transitioning from trials to procurement, gross margin performance, and technology roadmap changes in DDR6 and LPDDR will become key indicators for validating the company's growth logic.