China chips IPO strikes while the iron is hot

Samsung Electronics Co

28/05/2026 03:37

The authors are Reuters Breakingviews columnists.  The opinions expressed are their own.
By Hudson Lockett and Robyn Mak
HONG KONG, May 28 (Reuters Breakingviews) - Sometimes a market debutante's success isn’t about if, but when. ChangXin Memory Technologies has won a greenlight to go public from the Shanghai Stock Exchange's listings committee—and the timing couldn’t be better. The approval granted on May 27 will allow China’s top manufacturer of dynamic random access memory, or DRAM, to raise funds for expansion just as its earnings turn positive and semiconductor buyers worldwide face a serious supply crunch.
Everything about the deal suggests Beijing finally views CXMT as a proper up-and-coming national champion after years of trying to list. The state-backed chipmaker previously delayed its initial public offering plans in late 2023 on market volatility and regulatory feedback, per Bloomberg. Its upcoming IPO will raise at least 29.5 billion yuan ($4.4 billion) according to the Hefei-based firm’s prospectus, or nearly 34 billion yuan if over-allotment options are exercised. That would mark the largest debut in mainland China since CNOOC’s  600938.SS Shanghai share offer in 2022. The onshore market for blockbuster deals has since stalled as Beijing limits supply.
Unlike that offshore oil producer, CXMT is listing on the Shanghai exchange’s STAR Market, launched in 2019 with President Xi Jinping’s imprimatur to support the growth of fledgling tech titans. Star-listed firms have become the focus of onshore investors betting on advances in Chinese AI and command valuations of nearly 100 times earnings on average. The Star 50 Index .STAR50  up more than a third this year compared to gains of about 5% for the wider CSI 300 .CSI000300 benchmark index.
CXMT’s own performance has taken off as rising DRAM prices have handed it a well-timed windfall. In the three months to March, the manufacturer swung into a profit, thanks to a more than eightfold increase in sales, to almost 51 billion yuan. That has helped boost its global DRAM market share to 8%, versus just 3% a year ago, per research firm Counterpoint. Moreover, its operating margin of 70% is impressive, though that still trails Visible Alpha estimates of 80% or more for South Korean giants Samsung Electronics 005930.KS and SK Hynix 000660.KS, which together control over two-thirds of the global market.
A prolonged memory shortage puts the Chinese challenger in a strong position to grab more share. Indeed, its IPO proceeds will be used to aggressively ramp up capacity. The bigger prize would be a breakthrough in the high-end memory chips critical to AI, known as HBM. CXMT is roughly three to four years behind rivals, according to one estimate, but faces significant hurdles including U.S. export controls on advanced chipmaking equipment and tools. 
Whether it can close that gap in the future will be its ultimate mark of success, but in the present the Chinese chipmaker is primed to pass the far more fundamental test of pulling off a successful listing in a globally competitive industry.
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CONTEXT NEWS
Chinese memory chip maker ChangXin Memory Technologies’ application for an initial public offering was approved by the Shanghai Stock Exchange's listing committee on May 27. The planned listing on Shanghai’s technology-focused STAR Market will raise at least 29.5 billion yuan ($4.4 billion).

China's CXMT has grown its foothold in the global DRAM market https://www.reuters.com/graphics/BRV-BRV/lbpgyadrjpq/chart.png
(Editing by Una Galani; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on LOCKETT/ hudson.lockett@thomsonreuters.com))