China's Record Chip IPO
China's CXMT Plans Record Shanghai IPO, Fueling Chip Ambitions But Risking Liquidity Drain
Key Points
CXMT’s IPO structure includes 6.688 billion shares, roughly 10% of its total equity, with offline and online subscriptions scheduled for July 16.
CXMT is the world's fourth-largest DRAM maker with about 7.7% market share in 2025, and its first-quarter revenue surged to 50.8 billion yuan (up 700% year-on-year) with net profit of 25 billion yuan.
CXMT is blacklisted by the United States, underscoring geopolitical risk around China's memory-chip sector as the IPO proceeds.
The onshore IPO is expected to cause a liquidity drain in the near term, as funds are locked in for subscription and allocations, potentially reducing trading turnover, especially in tech stocks.
The prospectus frames the deal as boosting China’s broader IC ecosystem, aiming to coordinate development among memory designers, EDA vendors, materials suppliers, equipment makers, and downstream users.
China's memory-chip maker CXMT has formally kicked off an IPO on Shanghai's STAR Market, aiming to raise at least 29.5 billion yuan (about $4.3 billion), according to Caixin Global. If successful, it would be the largest-ever listing on the STAR Market and the second largest in the exchange's history.
Subscriptions for both offline and online investors are set for July 16, South China Morning Post reported. The deal covers 6.688 billion shares — roughly 10% of CXMT's total equity — and comes as China races to build a homegrown memory-chip industry.
CXMT's Explosive Growth Fuels Monster Valuation
CXMT is currently the world's fourth-largest DRAM maker, holding about 7.7% of global market share in 2025, according to TechZine. DRAM is the type of memory chip found in phones, PCs, and servers. The company is based in Hefei and has grown at a remarkable pace.
In the first quarter of 2025 alone, CXMT posted revenue of 50.8 billion yuan — a 700% jump from the same period a year earlier — with net profit hitting 25 billion yuan, South China Morning Post reported. Apple has even been eyeing CXMT's DRAM chips as a potential supplier, according to SE Daily.
IPO Proceeds Aimed at Expanding DDR5 and HBM Output
CXMT plans to use the funds raised to upgrade its production lines and push into next-generation memory types, including DDR5 and HBM (high-bandwidth memory used in AI chips), according to Digitimes. The company wants to move up the value chain fast.
The prospectus frames the deal as more than just a capital raise. CXMT says the listing will help coordinate China's broader chip ecosystem — connecting memory designers, materials suppliers, equipment makers, and end users, Caixin Global reported. It is a direct push to reduce China's reliance on foreign memory technology.
US Blacklist Adds Geopolitical Shadow Over the Deal
CXMT is on the United States export blacklist, meaning American companies cannot sell it advanced chip-making equipment or software without a special license. That restriction limits CXMT's access to the most cutting-edge tools. It also signals ongoing tensions between Washington and Beijing over semiconductor technology.
Despite the blacklist, investor appetite appears strong. TechZine noted the IPO is being called the largest Chinese listing in four years. The deal comes as other Chinese chip firms also rush to list onshore, riding a broader wave of enthusiasm for domestic tech stocks.
Mega-IPO Could Drain Liquidity From Broader Tech Market
A listing this size comes with a catch. During the subscription window, investors lock up cash to apply for shares. That temporarily pulls money out of the broader stock market. Analysts warn this could weigh on trading volume, especially in other tech stocks, in the short term.
South China Morning Post reported that some market watchers see the deal as a potential signal that the current bull run in Chinese tech stocks is nearing a peak. Still, most analysts view CXMT as a strong long-term growth story — a flagship name in China's bid to dominate the global memory chip market.
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