China's flagship DRAM player Changxin Memory Technologies (CXMT), the biggest "catch" in Asia's initial public offering (IPO) market this year, set its offer price and entered the final countdown to listing. As demand for memory chips surges with the spread of artificial intelligence (AI), Changxin Memory is cited as a symbol of China's semiconductor rise, and the market said this listing will be a litmus test for gauging China's progress on semiconductor self‑reliance.
According to its filing, Changxin Memory on the 14th set the offer price for its listing on the Shanghai Stock Exchange's STAR Market at 8.66 yuan per share (about 1,895 won). The offering size is expected to reach up to 66.6 billion yuan (about 14.5961 trillion won). That is twice the market's expectation and the second largest in China's history. Based on the offer price, the corporation value was estimated at about 579.2 billion yuan (about 127 trillion won).
Changxin Memory on the 16th began taking IPO subscriptions from retail and institutional investors. The exact listing date has not yet been disclosed, but the market expects it to be on the 27th of this month. Wu Zhou, a fund manager at Shenzhen Deyuan Investment, told Reuters, "Changxin Memory's corporation value could reach 3 trillion yuan (about 657 trillion won) to as high as 5 trillion yuan (about 1,095 trillion won) after listing." Changxin Memory plans to invest the funds raised in expanding production capacity and advancing manufacturing processes.
◇ Grew into the world's No. 4 DRAM maker… also returned to profit
Changxin Memory, founded in 2016, is China's largest DRAM chip manufacturer. The Chinese government actively fostered it with the goal of semiconductor self‑reliance. DRAM is a memory chip that stores short‑term data in various electronic devices such as smartphones, PCs, servers, and AI systems. Changxin Memory's current global DRAM market share is 7.7%, making it the world's No. 4 player after Samsung Electronics, SK hynix, and Micron. In China, it is also the only company capable of mass‑producing DRAM.
The company's growth has accelerated due to the global memory chip supercycle that began last year. As high‑capacity DRAM has been widely installed in AI servers and data centers, memory demand has surged, pushing up memory prices and boosting industry investment.
On this momentum, Changxin Memory's first‑quarter revenue this year came to 50.8 billion yuan (about 11.1246 trillion won), up 719% from a year earlier. First‑half revenue is expected to reach 110 billion to 120 billion yuan (about 24 trillion to 26 trillion won), roughly double last year's annual revenue of 61.8 billion yuan (about 13.5391 trillion won).
Profitability improved rapidly as well. First‑quarter net income swung to a profit of 25 billion yuan (about 5.4755 trillion won) from a loss of 1.6 billion yuan (about 350.4 billion won) a year earlier. Full‑year net income is forecast to reach 100 billion yuan (about 22 trillion won).
There had been a perception that many Chinese chip companies were relying on government subsidies and running deficits, but assessments say Changxin Memory used the AI boom as a springboard to improve both results and profitability. The Wall Street Journal (WSJ) said, "Its first‑half net margin is expected to exceed 45%, which is profitability on par with Samsung Electronics, SK hynix, and Micron during the chip boom."
◇ China's "semiconductor self‑reliance" on the line… HBM and U.S. sanctions are challenges
The market views this listing as more than simple fundraising. That is because of the role Changxin Memory plays in China's semiconductor industry. Spurred by the 2018 U.S.‑China trade dispute, the Chinese government made semiconductor self‑reliance a national strategy and has expanded investment and support to reduce dependence on overseas corporations. This trend has accelerated as the United States tightened export controls on advanced chips.
The Chinese government has provided policy support and injected large amounts of state‑owned capital into domestic chip companies such as Changxin Memory. According to the prospectus, state‑owned shareholders hold more than 36% equity in Changxin Memory. In addition, due to U.S.‑China tensions making it harder to procure overseas products, increased demand from Chinese corporations turning to domestic products also underpinned the company's growth.
On Changxin Memory's listing, the WSJ called it "one of the Chinese government's boldest attempts to challenge the global memory market's oligopoly and build self‑reliance in the chip supply chain," while Reuters said it "will be a test of whether China can nurture a competitive domestic corporation in the DRAM industry dominated by foreign companies."
Still, the technology gap with the leaders is cited as a continuing challenge. While Changxin Memory is rapidly gaining share in the commodity DRAM market, it trails Samsung Electronics, SK hynix, and Micron in high‑bandwidth memory (HBM), the core memory for AI Semiconductor.
U.S. export controls on advanced chip equipment are also cited as a hurdle to technology advancement. Reuters said, "Due to U.S. restrictions, Changxin Memory has found it difficult to secure state‑of‑the‑art chipmaking equipment from ASML and others, constraining efforts to narrow the technology gap with global rivals," adding, "Geopolitical risks also remain, as the U.S. Department of Defense last month designated Changxin Memory a 'Chinese military company.'"