Chinese chipmaker shares surge 470%

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Chipmaker CXMT becomes mainland China's most valuable listed firm<br>Skip to content

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Chinese chipmaker shares surge 470% in blockbuster stock market debut

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Peter HoskinsBusiness reporter

Reuters

Shares in China's biggest memory chip maker have surged by more than 470% as they made their debut on the Shanghai Stock Exchange's tech-heavy Star Market.

The surge has pushed ChangXin Memory Technologies' (CXMT) stock market valuation to around 3.3 trillion yuan ($487.3bn; £364.9bn), making it the most valuable listed company in mainland China.

The spectacular debut comes despite a sharp sell-off in technology stocks around the world this month.

CXMT manufactures dynamic random-access memory (Dram) chips that power artificial intelligence (AI) data centres, mobile phones, PCs, tablets and other devices.

The firm, which was founded in 2016 by Chairman Zhu Yiming, is headquartered in Hefei, Anhui Province in eastern China.

The company has said it plans to use most of the proceeds from the initial public offering (IPO) to boost production of memory chips and carry out more research and developments.

The stellar performance of its IPO will offer some comfort to Chinese financial officials, who have been rolling out measures to help curb a stock market slump that wiped out more than $1.5tn in recent weeks.

Analysts said the jump was also being driven by demand for the shares 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.

It also highlights Chinese investors' strong appetite for a homegrown chipmaker, as the government in Beijing pushes ahead with plans to make its technology industry self-reliant.

South Korean tech giants Samsung Electronics and SK Hynix and US-based Micron dominate the Dram market, with the three companies accounting for around 90% of global production.

Earlier this month, SK Hynix raised $26.5bn (£19.8bn) in its New York share offering, marking 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 for $149 each.

The shares surged as much as 17% on Friday in their first day of trading on the Nasdaq but have since given up some of that gain.

SK Hynix saw its market value top $1tn in its home country in May, lifted by the boom in demand for AI chips.

International Business<br>China<br>Stock markets<br>Semiconductors<br>Artificial intelligence

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