Focus is now on CXMT’s anticipated listing on Shanghai’s STAR Market later this month, an event that will set the stage for subsequent high-profile IPOs as Beijing emphasizes self-sufficiency in its technological competition with Washington.
In its statement on Sunday, CXMT, the top memory chip maker in China, revealed that institutional investors, including mutual funds, pension funds, and insurers, collectively subscribed for 1.24 trillion shares, against the 2.17 billion IPO shares available to them.
This results in an oversubscription ratio of approximately 570 times. Although this figure indicates robust demand, it is considerably lower than the oversubscription rates seen in recent STAR Market IPOs.
For instance, shares offered in public sales by Zhuhai Trinomab Pharmaceutical Co, Chongqing Genori Technology Co, and Wuhan Changjin Photonics were oversubscribed by over 5,000 times by institutional investors.
CXMT’s IPO, which stands as Asia’s largest this year, emerges amid a significant sell-off in previously high-performing chip stocks, raising concerns among investors from Seoul to Silicon Valley about whether the AI boom may have become excessive and outstripped its fundamentals.
On the STAR Market, which houses many leading chip stocks in China, there has been a decline of about 25% from its peak on July 1, erasing more than 4 trillion yuan ($590.32 billion) in market value.
The announcement on Sunday followed CXMT’s report that the retail segment of its IPO was oversubscribed by 243.93 times, further underscoring reduced investor enthusiasm.
CXMT ranks as the world’s fourth-largest DRAM chipmaker after Samsung, SK Hynix, and Micron Technology, but it has not yet revealed the exact date for its listing on the STAR Market. Sources indicated to Reuters that the stock is expected to debut on July 27.
The demand for DRAM, which stands for dynamic random-access memory chips used in smartphones, computers, servers, and other electronics, has been boosted by the ongoing AI boom.
