China’s CXMT seeks up to $9.8 billion in Shanghai IPO

China’s ChangXin Memory Technologies is seeking to raise up to $9.8 billion in an initial public offering as China tries to strengthen its domestic chip industry for artificial intelligence.

The Anhui-based memory chipmaker said it would raise at least 57.9 billion yuan, or $8.6 billion, through a share sale and listing on the Shanghai Stock Exchange. The amount could rise to 66.6 billion yuan, or $9.8 billion, if an overallotment option is used.

The planned listing would be China’s largest mainland IPO since 2010 and its biggest mainland technology share sale. It would exceed the 46.3 billion yuan raised by Semiconductor Manufacturing International Corp in 2020.

CXMT is seeking to compete with Micron, Samsung Electronics and SK hynix in memory chips used in AI data centres. The company was founded in 2016 and is the world’s fourth-largest DRAM chipmaker, with nearly eight percent market share, behind Samsung, SK hynix and Micron.

Demand for advanced memory chips has risen because they are key parts of AI servers. The source report said this has lifted profits for producers and contributed to a shortage of DRAM memory chips used in laptops, phones and other electronics, raising prices. Apple is reportedly testing CXMT’s DRAM chips for possible use in its products.

CXMT is on the Pentagon’s list of Chinese companies with alleged military ties. The report said that listing does not prohibit US companies from doing business with such companies.

Analysts cited in the report said CXMT could be important to China’s efforts to reduce reliance on foreign hardware. Larry Yang, chief economist of First Seafront Fund Management, called the planned IPO “a milestone” for China’s semiconductor industry. Zhang Guobin, founder of Chinese semiconductor industry website eetrend.com, said domestic memory chip production would support China’s AI buildout and said the IPO would make China’s stock market more attractive to investors.

Public subscriptions are due to begin on Thursday, with the IPO price set at 8.66 yuan per share. Liang Dongjian, a partner at Huaxin Capital, said CXMT’s IPO signals to equipment and materials suppliers that there is a fast-growing major customer, and said that pull from a market leader works better than industrial policy.