Chinese semiconductor company CXMT's stock surged over 500% during its debut on the Shanghai stock exchange, making it the most valuable publicly listed Chinese company with a market cap of approximately $539 billion. The stock opened at Rmb49.50, significantly above its IPO price of Rmb8.66, raising nearly $10 billion from the issuance of 6.7 billion shares. This IPO, the largest in mainland China since 2010, reflects the growing demand for memory chips driven by AI applications, despite the company's past losses of Rmb37 billion. CXMT is now focusing on expanding DRam production, with plans to increase its capacity significantly by 2028, though it faces challenges due to US export restrictions affecting access to advanced manufacturing technologies. Support from the local government has bolstered its growth trajectory.

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Chinese chip champion CXMT soars more than 500% in market debut

Tech group becomes China’s most valuable listed company in mainland’s biggest IPO since 2010

An illustration showing the CXMT logo on a screen with a rising red stock graph in the background. CXMT is raising money to expand production as well as research and development of DRam chips© Dado Ruvic/Reuters

current progress 100%

William Sandlund in Hong Kong and Eleanor Olcott in Beijing

Publishedyesterday

Updated00:45

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CXMT shares soared more than 500 per cent in their trading debut in Shanghai on Monday as investors flocked to the chipmaker amid booming demand for AI memory chips.

The stock opened at Rmb49.50 ($7.30) a share, compared with an IPO price of Rmb8.66 and rose further in afternoon trading to Rmb54.65.

The surge sent CXMT’s market value to Rmb3.65tn ($539bn), making it the most valuable public Chinese company ahead of Hong Kong-listed Tencent, worth $514bn.

“We knew it was going to be a big IPO,” said Tilly Zhang, a technology and industrial policy analyst at Gavekal Dragonomics in Beijing. “Still, it’s surprising how people have been so enthusiastic.”

The chipmaker is the world’s fourth-largest producer of DRam — the chips used in devices from servers to cameras — behind SK Hynix, Samsung Electronics and Micron.

The IPO was widely anticipated in China as CXMT has benefited from a global shortage of memory chips caused by the enormous AI demand.

CXMT issued 6.7bn shares and raised Rmb57.9bn ($8.5bn), making it mainland China’s largest initial public offering since Agricultural Bank of China in 2010.

There is an overallotment option to issue an additional 1bn shares that, if exercised, will bring the funds raised to nearly $10bn.

The share price jump is part of a broader investor frenzy in mainland China for companies with links to the AI supply chain.

The investor enthusiasm has pushed CXMT’s price-to-earnings ratio above 1,800, although this has in part been justified by surging profits.

CXMT’s debut comes two weeks after SK Hynix, the South Korean memory-chip maker, raised more than $26bn in a US listing.

The Chinese chipmaker is raising money to expand production as well as research and development of DRam chips, which store short-term memory in computers.

It operates three DRam wafer factories in Beijing and Hefei, the capital of Anhui province, and wrote in its IPO prospectus that it was “committed to continuously expanding production capacity and increasing its global market share”.

Research firm SemiAnalysis estimated that the group will have capacity to start 350,000 new wafers a month by the end of this year — close to Micron’s 385,000 capacity — and reach 500,000 by the end of 2028.

CXMT turned profitable this year, raking in Rmb33bn ($4.9bn) in the first quarter alone, in a striking reversal from the Rmb37bn in losses it built up over the past decade. The company has benefited from a surge in demand for memory chips from AI inference, which has triggered shortages and price rises.

Its profits are coming from selling lower-end chips used in household electronics, Zhang said: “It’s focused on consumer products like PCs and home appliances because the leading chipmakers are focusing on [high-bandwidth memory] chips.”

The company is also developing high-bandwidth memory chips that are used in AI data centres.

However, CXMT lags behind the other global players, in large part because US export controls have barred it from accessing the most advanced manufacturing tools from Netherlands-based ASML.

“It’s not mass-producing” such chips yet, Zhang added.

CXMT’s rise represents a success in Beijing’s push to build its own domestic AI supply chain insulated from US export controls on key technologies.

It received sustained support from the local government in Hefei, which provided financing, cheap land and help to attract suppliers to move close to the sprawling campus in the city.

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