China's CXMT launches $4.1B Shanghai IPO at $417B valuation

What's the deal? ChangXin Memory Technologies (CXMT), a Chinese DRAM maker based in Hefei, has launched a Shanghai IPO aiming to raise 29.5 billion yuan ($4.1 billion). The listing values the company at roughly $417 billion and began accepting subscriptions last week.

Why now? CXMT reached profitability for the first time last year, according to the South China Morning Post. That milestone cleared the way for founder Zhu Yiming to end a pledge he made in 2018 not to take a salary until the memory-chip project turned a profit.

Who's behind it? Zhu's involvement in Chinese memory chips predates CXMT by more than two decades. Working as a Silicon Valley engineer with a chip design but limited funds, he argued the global memory industry's center would eventually shift to mainland China.

In emails preserved by early investor Li Jun and later reproduced in a Tsinghua University alumni publication, Zhu noted the industry had moved from the United States to Japan, then to South Korea. He said it was time for China to take a role in that industry.

What's the endgame? CXMT is China's leading domestic DRAM producer, one prong of a national push to build homegrown memory capacity. Analysts have suggested it could eventually reach a market value of 3 trillion yuan, which would place it among China's most valuable listed technology companies.

The signal: The offering underscores China's drive to build a self-sufficient chip industry, alongside NAND maker Yangtze Memory TechnologiesDealroom has a profile for this one. Try Dealroom → (YMTC) and others. A profitable CXMT going public at scale signals that domestic memory production is maturing from a state-backed ambition into a commercially viable business.

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Image credit: IBM Research