China's leading DRAM manufacturer, Changxin Memory Technologies (CXMT), often referred to as the "Samsung and SK Hynix of China," is set to launch the largest initial public offering (IPO) in Chinese history on July 27, capitalizing on the AI investment boom.
On the evening of July 14, CXMT announced through 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, according to local media reports on July 15.
The IPO is expected to raise 57.91 billion yuan, and with the inclusion of the greenshoe option, the total could exceed 66.6 billion yuan. This amount significantly surpasses 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 exceed 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 the IPO to enhance its production lines and develop next-generation memory technologies. The company is expected to begin its public offering subscription on July 15, with the listing scheduled for July 27, according to Reuters.
Founded in 2016 in Hefei, Anhui Province, CXMT has emerged as a leader in China's DRAM semiconductor sector. 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 market. With explosive growth driven by the booming semiconductor market amid the AI investment surge, CXMT captured a 7.7% share of the global market by the end of last year, ranking as the fourth-largest DRAM manufacturer worldwide, following Samsung, SK Hynix, and Micron.
Despite cumulative losses reaching 36.65 billion yuan (approximately $5.4 billion) by the end of last year, CXMT's performance is expected to rebound sharply this year due to a surge in demand for memory used in AI servers. In the first quarter of this year, revenue skyrocketed by 719% year-on-year, with net profit soaring by 1,688% to reach 33 billion yuan, indicating a substantial turnaround.
Recognized as a key player in China's strategy for semiconductor self-sufficiency and AI supply chain development, CXMT has also received significant 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 include 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 backing from both the Chinese government and major tech companies for the AI memory supply chain.
Meanwhile, amid the global enthusiasm for AI investments, significant fundraising efforts are also underway across China's AI industry. On July 15, Bloomberg reported that Chinese AI startup DeepThink is also considering a domestic IPO within the year.
* This article has been translated by AI.
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