Chinese semiconductor companies are rapidly pursuing initial public offerings (IPOs). Since June, six companies have either gone public or are in the process of doing so. This surge follows the Chinese government's significant support for the capital market in alignment with its artificial intelligence (AI) and semiconductor self-sufficiency strategies. Analysts are calling this the start of 'Semiconductor Ascendancy Season 2.' While Season 1 focused on narrowing the technology gap, Season 2 aims at large-scale fundraising to expand production capacity.
According to financial investment sources on July 22, Changxin Memory Technologies (CXMT), a leading Chinese DRAM manufacturer, is set to list on the Shanghai Stock Exchange's STAR Market on July 27. The expected market capitalization at the issue price is approximately 645 billion yuan (about $142 billion). The actual fundraising amount is projected to exceed the initial plan of 29.5 billion yuan (about $6.7 billion), reaching around 65 billion yuan (about $14.7 billion), marking the largest IPO in STAR Market history, surpassing the previous record set by SMIC in 2020.
CXMT has shown impressive growth, with revenues of 61.8 billion yuan last year, a 156% increase from the previous year, and a net profit of 1.9 billion yuan, marking a return to profitability. In the first quarter of this year, the company reported revenues of 50.8 billion yuan and a net profit of 24.8 billion yuan, representing year-on-year increases of 719% and 1,688%, respectively.
Yangtze Memory Technologies Co. (YMTC), a NAND flash manufacturer, is also preparing for a STAR Market listing. This means that both major Chinese memory companies in the DRAM and NAND sectors are entering the capital market. Additionally, on July 1, silicon photonics company XPHOR and SSD controller firm InnoGrit filed for IPO preliminary reviews. Earlier, on June 15, AI chip developer EnFlame and 12-inch wafer manufacturer CanSemi passed their IPO reviews.
The IPO rush is closely tied to the Chinese government's policy support. The China Securities Regulatory Commission established an innovation growth track for the STAR Market last year, allowing the listing of technology-driven loss-making companies. In June of this year, the commission expanded the listing criteria to include AI companies, aiming to accelerate funding for AI and semiconductor firms as part of the 'Semiconductor Ascendancy Season 2' strategy.
Market analysts are focusing on the potential for the substantial funds raised through these IPOs to lead to increased production capacity and research and development investments. Given that China accounts for 20-25% of global DRAM demand, the expansion of domestic companies could alter the supply structure of the memory market in the long term.
According to market research firm TrendForce, CXMT's global DRAM market share rose from 4.1% in the first quarter of 2025 to 7.6% in the first quarter of this year. Another research firm, SEMI, projects that the market share could reach 17% by 2028.
Lee Min-hee, a researcher at BNK Investment & Securities, noted, 'CXMT currently has a monthly production capacity of 300,000 DRAM wafers, and its domestic market share has expanded from 13% to 26% in just one year. With the mass production of DDR5 underway, the company is beginning to enter the supply chains of global PC and smartphone manufacturers.' He added, 'The AI boom could provide an opportunity for Chinese memory companies to enter the global IT market, which may pose challenges for domestic firms during downturns.'
As global memory companies focus their production capacity on HBM, CXMT is rapidly capturing the mobile and server DRAM markets. Shin Seung-woong, a researcher at Shinhan Investment Corp., stated, 'While the supply shortage is expected to continue through 2026-2027, the impact may not be significant. However, after 2028, if the market slows down, the expansion by Chinese companies could lead to a decline in general DRAM prices and weaken the negotiating power of global firms.'
Conversely, since CXMT's competitiveness is concentrated on general DRAM products like DDR5 and LPDDR5X, its impact on the HBM market, which is crucial for AI memory, is expected to be limited in the near term. Shin added, 'Although CXMT has outlined a development roadmap for HBM3 and HBM3E, the absence of EUV equipment and yield issues suggest that the technology gap with Samsung Electronics, SK Hynix, and Micron will remain at least three years. Initial supply is likely to be limited to Chinese AI customers like Huawei.'
* This article has been translated by AI.
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