China’s leading memory chipmaker CXMT became the most valuable company on the mainland after its shares surged more than 500% on its initial public offering in Shanghai.
The IPO pushed ChangXin Memory Technologies’ market capitalization to 3.65 trillion yuan ($540 billion), surpassing ICBC and marking the largest mainland tech share sale ever. The company raised 66.6 billion yuan ($9.8 billion), eclipsing the previous record set by Semiconductor Manufacturing International Corp in 2020.
AI demand fuels chipmaker’s rise
The surge shows investor confidence in China’s push to lead the global semiconductor market, especially as artificial intelligence drives demand for memory chips. CXMT, the world’s fourth-largest maker of DRAM chips, holds 8-9% of the global market, trailing Samsung (36%), SK Hynix (29%) and Micron Technology (24%), according to Counterpoint Research data.
But the AI boom has created a shortage of these components, used in smartphones and data centers. The scarcity has pushed prices higher, benefiting manufacturers. CXMT is reportedly testing its DRAM chips for potential use in Apple products.
Larry Yang, chief economist at First Seafront Fund Management, said the IPO reflects “investors’ overwhelmingly bullish sentiment” toward China’s domestic chip sector. The capital infusion will help CXMT expand production and increase its share of the market. Zhang Guobin, founder of the Chinese tech site eetrend.com, called the listing a “turning point” for China’s semiconductor industry and the broader memory chip market.
Analysts warn that CXMT’s growth won’t immediately ease the chip shortage. Ellie Wang, an analyst at TrendForce, noted that expanding production capacity typically takes a year or more. “As customers diversify their supplier base amid the shortage, CXMT should gain further opportunities,” she said, though the current crunch will likely persist.
Related: Asia Tech Stocks Fall on China Fears
Military ties and geopolitical risks
CXMT, founded in 2016 and based in Anhui province, is on the Pentagon’s list of Chinese companies with alleged military ties, though the designation does not prohibit U.S. firms from doing business with them.
China’s government has made semiconductor self-sufficiency a priority, investing heavily to reduce reliance on foreign suppliers. The strategy supports broader efforts to lead in AI, where memory chips play a key role. For CXMT, the IPO provides funds to compete with established players, though catching up to Samsung and SK Hynix will require sustained investment and technological advances.
The company’s success also marks a shift in investor sentiment. Chinese tech firms faced scrutiny over regulatory crackdowns and geopolitical pressures for years. The AI boom has renewed interest in semiconductor stocks, with CXMT’s IPO signaling the sector’s potential.
CXMT’s rise offers a rare bright spot for China’s tech industry. It proves that even in a fragmented market, domestic players can still draw global attention.
Foreign investment in emerging markets has also seen shifts. Mexico ranks among the top 10 economies for such inflows, reflecting broader trends in manufacturing and supply chains.
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