Shares in China’s biggest memory chip maker have surged by more than 470 percent on their debut on the Shanghai Stock Exchange’s tech-heavy Star Market.
The jump has lifted ChangXin Memory Technologies, known as CXMT, to a valuation of around 3.3 trillion yuan ($487.3 billion), making it the most valuable listed company in mainland China. The spectacular debut came despite a sharp sell-off in technology stocks around the world this month.
CXMT manufactures dynamic random-access memory, or Dram, chips that power artificial intelligence data centres, mobile phones, PCs, tablets, and other devices. Founded in 2016 by chairman Zhu Yiming, the company is headquartered in Hefei, in eastern China’s Anhui Province. It has said it plans to use most of the proceeds from the initial public offering to expand memory chip production and step up research and development.
The strong performance will offer some relief to Chinese financial officials, who have been rolling out measures to curb a stock market slump that wiped out more than $1.5 trillion in recent weeks.
Analysts said the surge was also driven by demand far outstripping supply. “The reason for the extraordinary bounce this morning is that only 7% of the shares are available for trading,” Anna Macdonald, investment strategy director at Hargreaves Lansdown, told the BBC’s Today programme. The debut also underscores Chinese investors’ strong appetite for a homegrown chipmaker as Beijing pushes ahead with plans to make its technology industry self-reliant.
A Market Dominated by a Few
South Korean tech giants Samsung Electronics and SK Hynix, along with US-based Micron, dominate the Dram market, together accounting for around 90 percent of global production.
Earlier this month, SK Hynix raised $26.5 billion in its New York share offering, the largest ever listing by a foreign firm in the US. The company, a key supplier to AI chip giant Nvidia, said it had sold 177.9 million American depositary shares at $149 each. The shares surged as much as 17 percent on their first day of trading on the Nasdaq before giving up some of that gain. SK Hynix saw its market value top $1 trillion in its home country in May, buoyed by the boom in demand for AI chips.
