CXMT shares went bonkers on their Shanghai debut on Monday, briefly making the chipmaker China’s most valuable company.
According to the Financial Times, investors piled into the world’s fourth-biggest memory-chip maker, treating it as proof that Beijing’s homegrown AI supply chain is not vapourware.
The shares closed at US $7.24, miles above the $1.28 IPO price, after trading pushed CXMT’s value as high as US $547 billion.
That increased the value of the outfit by 466 per cent, ahead of Hong Kong-listed Tencent, which is not bad for a company still chasing the grown-ups.
CXMT, based in Hefei, capital of Anhui province, has surfed the data-centre boom as memory-chip prices have shot up. The company is the world’s fourth-largest producer of DRAM.
SK Hynix, Samsung Electronics and Micron still sit ahead of CXMT, which means Beijing has not quite won the bragging contest yet.
The float raised $8.5bn from the sale of 6.7bn shares, making it mainland China’s biggest IPO since Agricultural Bank of China in 2010.
CXMT has an option to sell another 1bn shares, because apparently the market had not chewed through enough already.
Gavekal Dragonomics technology and industrial policy analyst Tilly Zhang said. “We knew it was going to be a big IPO. Still, it’s surprising how people have been so enthusiastic.”
The debut came two weeks after South Korean chipmaker SK Hynix raised more than $26bn in a US listing.
CXMT is raising cash to expand production and research and development for DRAM chips, which store short-term memory in computers.
The company runs three DRAM wafer factories in Beijing and Hefei and said in its IPO prospectus it was “committed to continuously expanding production capacity and increasing its global market share”.
It is believed that CXMT could reach capacity for 350,000 new wafers a month by the end of this year, close to Micron’s 385,000. It will reach 500,000 wafers a month by the end of 2028.
CXMT turned profitable this year, pulling in Rmb33bn ($4.9bn) in the first quarter after racking up Rmb37bn in losses during the past decade.
The reversal came as AI inference sparked memory-chip shortages and price rises, giving even second-tier silicon a lovely little payday.
Zhang said CXMT’s profits mainly came from lower-end chips used in household electronics, while leading rivals focused on high-bandwidth memory for AI data centres.
Some investors and analysts warned that rising Chinese output could hammer memory-chip prices and hurt established DRAM makers such as Samsung and SK Hynix.
CXMT is developing HBM chips too, though US export controls have blocked access to ASML’s most advanced manufacturing tools.
“It’s not mass producing” such chips yet, Zhang said.
