Chinese NAND flash manufacturer Yangtze Memory Technologies Co. (YMTC) plans to raise 33 billion yuan (approximately $4.6 billion) through an initial public offering (IPO). Following the listing procedures of CXMT in the DRAM sector, YMTC's move intensifies competition in the memory market traditionally dominated by Samsung Electronics and SK Hynix.
According to Yonhap News on August 22, YMTC's parent company, Changjiang Storage Technology Co. (CCSH Corporation), submitted its listing application to the stock exchange the previous day.
The company stated that it plans to allocate 20.8 billion yuan for upgrading production line technology and 12.2 billion yuan for research and development (R&D).
Reuters noted that this IPO would rank as the third largest in the history of the STAR Market, following CXMT and foundry firm SMIC. YMTC is expected to issue between 1.98 billion and 2.43 billion new shares, with a post-listing valuation estimated between 275 billion and 330 billion yuan (approximately $39.1 billion to $47.1 billion). Taiwan's Economic Daily reported that the listing could occur as early as the fourth quarter of this year.
YMTC's growth is reflected in its market share metrics. According to market research firm TrendForce, it ranked third in both revenue and shipment volume in the first quarter of this year. Counterpoint Research reported that in the second quarter, YMTC achieved a 14% market share in shipment volume, surpassing Kioxia. However, it ranked fifth in revenue, indicating a significant gap in profitability compared to its competitors.
The company's financial performance has improved sharply. According to YMTC's investment prospectus, its revenue for the first quarter of this year reached 47.04 billion yuan (approximately $6.7 billion), already exceeding its total revenue for 2024, which was 45.2 billion yuan. During the same period, its net profit attributable to shareholders was 33.38 billion yuan (approximately $4.8 billion), nearly five times the projected annual net profit for 2024.
After reporting a loss of 19.18 billion yuan in 2023, the company has quickly turned profitable. However, its R&D spending as a percentage of revenue remains below the industry average, and the gap in revenue and net profit compared to Samsung and SK Hynix is still substantial.
In its investment prospectus, the company expressed optimism, stating, "Essential infrastructure memory is expected to benefit in the long term," and anticipates that the current semiconductor upcycle will differ from past cycles by being more prolonged. However, it also acknowledged uncertainty regarding the duration of the NAND flash boom, citing potential price declines due to slowing demand growth and significant production capacity expansions by memory manufacturers.
The company noted that its revenue sources, international recognition, and practical experience in global market competition are somewhat limited. It also indicated that geopolitical factors have constrained its expansion into overseas markets.
Founded in 2016 in Wuhan, Hubei Province, Changjiang Storage Technology Co. is listed on both the U.S. Department of Defense's '1260H List' of companies supporting the Chinese military and the U.S. Department of Commerce's export restriction blacklist.
* This article has been translated by AI.
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