China’s memory semiconductor company ChangXin Memory Technologies (CXMT) closed at 49.0 yuan on the first day of its listing on the Shanghai STAR Market on the 27th, up 465.82% from its initial public offering price of 8.66 yuan. Its market capitalization at the close stood at 3.28 trillion yuan, or about 712 trillion won, making it the largest among mainland-listed Chinese companies.
At one point during the session, the stock rose as much as 535% above the IPO price. Daily trading volume was estimated to have exceeded 30 trillion won. Its market value also surpassed that of U.S. semiconductor company Intel.
Asia’s largest IPO; warning of volatility with only 6% of shares available for trading
CXMT raised 57.92 billion yuan, or about 12.5 trillion won, through the issuance of new shares at the IPO price of 8.66 yuan. Including the over-allotment option, the offering could reach as much as about 14.4 trillion won. It is the largest IPO in Asia this year and the biggest ever by a Chinese semiconductor company. The company said the proceeds will be used to expand production lines and advance DRAM technology.
Founded in Anhui Province, China, in 2016, CXMT is now regarded as the world’s fourth-largest DRAM maker after Samsung Electronics, SK hynix and Micron, just 10 years after its establishment.
The STAR Market, operated by the Shanghai Stock Exchange, is a technology-focused board on which new listings are not subject to price limits during the first five trading days, creating the institutional backdrop for the stock’s 400%-plus surge on day one.
The strong IPO demand was already evident during the subscription process. Funds far exceeded the originally targeted offering size of 29.5 billion yuan, leading to an expansion of the final fundraising scale.
There are also views cautioning about volatility. Reuters reported that, due to lock-up commitments and other factors, only about 6% of the total shares are actually available for trading immediately after the listing, which could lead to sharp price swings. Analysts say the first-day rally reflects expectations for Chinese semiconductor self-sufficiency more than the company’s earnings.
Market share rises from 3% to 8% in one year, absorbing the gap in commodity DRAM supply
According to Counterpoint Research, Samsung Electronics held 38% of global DRAM market revenue in the first quarter of this year, followed by SK hynix with 29% and Micron with 22%. CXMT ranked fourth with 8%. Its share, which stood at 3% in the same period last year, more than doubled in a year.
A share of 8% also solidifies its position in fourth place. In a market long dominated by the top three companies, a fourth player has emerged with the potential to surpass double-digit share.
DRAM is memory used by computers, smartphones and servers for temporary data storage, and it is a component found in most electronic devices. The global market has effectively been an oligopoly dominated by three companies from South Korea and the United States.
The rapid pace of CXMT’s share gains is interpreted as a sign that changes are emerging in the existing three-company structure.
Industry observers point to the reshaping of the memory market in the AI era as the backdrop for CXMT’s growth. As Samsung Electronics, SK hynix and Micron have concentrated on higher-value products such as high-bandwidth memory (HBM) and DDR5, supply of commodity DRAM has declined, and CXMT has absorbed that demand, analysts say.
Commodity DRAM is a standardized market in which price largely determines purchase decisions. It is generally considered an area where late entrants with lower production costs can relatively easily enter by leveraging volume.
Another growth driver cited is China’s push for memory self-sufficiency backed by government support. More recently, rising AI demand has also increased the pricing power of Chinese memory makers, according to analysts. If latecomers continue expanding in the commodity market, the profitability of existing players’ commodity products could come under pressure.
HBM3 sample developed; yield and cycle remain as key variables
While expanding mass production of next-generation DRAM, CXMT is also working to strengthen its technological competitiveness by developing a sample of its own DDR5-based fourth-generation high-bandwidth memory, HBM3. Although there remains a gap in performance and yield compared with Samsung Electronics, SK hynix and Micron, industry attention is growing because the Chinese company is securing in-house HBM development capabilities.
The most advanced HBM development stage CXMT has disclosed so far is the sample, or prototype, level. Customer certification and mass production still remain separate steps.
HBM is a memory that stacks DRAM chips vertically to increase data processing speed, and it is a core component of AI servers. Because its technical barriers are higher than those of commodity DRAM, it has long been effectively monopolized by the three South Korean and U.S. companies.
However, observers note that there is a gap between sample development and mass production. The hurdle lies in yield between prototype fabrication and large-scale production that meets customer quality standards. Since memory is an equipment-intensive industry requiring massive capital to secure production capacity and yields, the funds raised this time are seen as a variable that could determine the speed of CXMT’s catch-up.
Memory semiconductors are an equipment-heavy industry that requires trillions of won in capital to build production facilities. That is why the size of this fundraising is being watched as a factor that could shape CXMT’s pace of expansion and technology development.
Yield refers to the proportion of normally functioning chips among those produced. If yield is low, fewer chips can be sold even with the same equipment, undermining cost competitiveness.
Economic cyclicality is also being cited as another variable. Although AI demand remains strong, memory is a classic cyclical industry, meaning future market conditions could affect earnings and investment pace. Even after the lock-up period ends and tradable shares increase, whether the stock can maintain its first-day level remains a question for the market.
The ongoing U.S. export controls on semiconductor technology to China are also seen as a factor affecting CXMT’s ability to catch up technologically. The industry broadly assesses that the company faces the challenge of narrowing the gap through in-house technology under restrictions on securing advanced equipment.
The domestic semiconductor industry is closely monitoring how the raised funds will be deployed. Depending on which processes and products receive the most investment, the intensity of price competition in commodity DRAM and the pursuit of HBM will differ.
In the securities market, attention is also focused on whether SK hynix and Samsung Electronics, scheduled to announce their second-quarter results on the 29th and 30th respectively, will mention their assessment of and response to the challenge from Chinese rivals.
The extent to which CXMT can enter the DRAM market long dominated by Samsung Electronics and SK hynix is expected to be determined once expansion and yield improvements are confirmed.