Changxin Memory Technologies (CXMT), known as China's equivalent to Samsung Electronics and SK Hynix, is set to launch the largest initial public offering (IPO) in Chinese history on July 27, fueled by a boom in AI investments.
On July 14, CXMT announced through a disclosure to the Shanghai Stock Exchange that it plans to issue up to 6.688 billion shares at a price of 8.66 yuan per share, representing 10% of its total shares. Local media, including the China Securities Journal, reported this on July 15.
The total fundraising is expected to reach 57.91 billion yuan, and with the inclusion of the greenshoe option, it could exceed 66.6 billion yuan. This amount is more than double the initial target of 29.5 billion yuan, making it the largest IPO in Asia this year and the biggest for a Chinese semiconductor company on the mainland. It is also anticipated to surpass the 53 billion yuan IPO of Semiconductor Manufacturing International Corporation (SMIC), which went public on the STAR Market in 2020.
CXMT plans to use the funds raised from this IPO to enhance its production lines and develop next-generation memory technologies. According to Reuters, the company will begin accepting subscriptions for its shares on July 15, with the listing expected on July 27.
Founded in 2016 in Hefei, Anhui Province, CXMT is a leading player in China's DRAM memory semiconductor market. The company achieved a significant milestone in September 2019 by successfully mass-producing DDR4, a key DRAM product, marking a breakthrough in China's previously underdeveloped memory semiconductor sector. With the surge in demand for AI server memory, CXMT has experienced explosive growth, capturing a 7.7% share of the global market by the end of last year, making it the fourth-largest DRAM manufacturer worldwide, following Samsung, SK Hynix, and Micron.
The company's financial performance has also shown a sharp upward trend. Although it reported cumulative losses of 36.65 billion yuan (approximately $5.5 billion) by the end of last year, the demand for AI memory is expected to lead to a significant turnaround in its financial results this year. In the first quarter, revenue surged by 719% year-on-year, with net profit skyrocketing by 1,688% to reach 33 billion yuan, indicating a substantial profit is anticipated.
As a key player in China's strategy for semiconductor self-sufficiency and AI supply chain development, CXMT has received substantial support from the Chinese government. The IPO was approved just 164 days after the company submitted its application on December 30 of last year.
The strategic investors participating in this IPO are notable, including major Chinese tech firms such as Meituan, Alibaba, and Tencent, as well as long-term funds like the National Social Security Fund, pension insurance funds, and the State-owned Assets Supervision and Administration Commission. This reflects the strategic support from the Chinese government and big tech for the AI memory supply chain.
Meanwhile, amid the global enthusiasm for AI investments, significant fundraising is also occurring across China's AI industry. On July 15, Bloomberg reported that Chinese AI startup DeepMind is also considering a domestic IPO within the year.
* This article has been translated by AI.
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