Asia's largest IPO: How CXMT became China's most valuable company

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Asia's largest IPO

A spectacular debut

CXMT shares began trading on July 27 on Shanghai’s STAR Market. The company priced the stock at about $1.28 per share, but it opened at $7.31. The shares gained 472% at the open, while the increase later exceeded 500%, Bloomberg reported.

CXMT’s market value rose to about $539 billion. This allowed the chipmaker to overtake the Industrial and Commercial Bank of China and become the most valuable company listed in mainland China.

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CXMT raised about $8.6 billion in the IPO. The total could increase to $9.8 billion if an over-allotment option is fully exercised. It was the largest semiconductor IPO in mainland China and the country’s second-largest listing ever, behind Agricultural Bank of China’s market debut in 2010.

Demand was especially strong among retail investors. They submitted 9.4 million orders for more than $1 trillion worth of shares. Trading turnover in CXMT stock reached about $18 billion during the first half of the session.

Memory for AI

Strong demand for the shares is linked to CXMT’s role in the chip market. The company produces DRAM, the type of memory used in smartphones, computers, servers and AI systems.

CXMT is the world’s fourth-largest DRAM producer. It trails only South Korea’s Samsung Electronics and SK Hynix, as well as U.S.-based Micron. The Chinese company held about 11% of the global market in 2025. SemiAnalysis expects its share to rise to 15% by 2028.

The expansion of AI is driving demand for these chips. Modern servers need to process large amounts of data quickly, which requires more memory. TrendForce analysts expect the market shortage to continue at least through the end of 2027, with prices likely to keep rising.

According to CNBC, a significant share of CXMT’s future output has already been reserved by customers. Apple is among the potential buyers and has started testing CXMT chips for devices sold in China.

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The company also has strategic importance for Beijing. A large domestic memory producer reduces China’s reliance on Samsung, SK Hynix and Micron, whose products could be affected by U.S. export restrictions.

A city-backed project

CXMT’s rise is closely tied to Hefei, the capital of China’s Anhui province. Local authorities helped establish the company in 2016 through an investment vehicle linked to the city’s economic and technological development zone. Initial funding amounted to about $1.5 million.

Over the following years, CXMT completed nine private funding rounds. Its backers included Hefei government-linked entities, the Anhui provincial government, China’s national semiconductor fund, private investment funds and technology companies.

By the time of the IPO, Hefei-linked investors controlled 36.8% of CXMT. At the offering price, their stake was worth about $31.5 billion. That was more than twice the city’s annual revenue in 2025.

Including other state-backed entities, government ownership in CXMT approached 50%. Hefei-linked investors did not sell shares in the IPO and retained their holdings.

Company founder Zhu Yiming also remained a major shareholder. At the IPO price, his stake was worth about $2 billion. He allocated part of his shares to an employee incentive program.

The price of success

Government support helped CXMT expand production quickly, but after its market debut the company faced another problem: an extremely high valuation. Its market capitalization approached $540 billion on the first day of trading, compared with an IPO valuation of about $85.5 billion.

The small number of freely tradable shares amplified the rally. Only 6.73% of CXMT’s enlarged share capital entered free circulation, while most of the stock remained locked up. With such a limited float, even relatively modest demand can cause sharp price swings.

Some investors have already described the rally as speculative. Wu Zhou, a fund manager at Shenzhen Deyuan Investment, said he sold all the shares he received in the IPO as soon as trading began. He added that he was not prepared to buy the stock at its new price.

CXMT also faces technological limitations. It remains the world’s fourth-largest DRAM producer but still trails industry leaders in the most advanced memory products used in AI systems. Morningstar analysts believe this gap could limit the company’s share of the market’s most profitable segments.

CXMT itself has warned that the market could turn if companies reduce AI investment or chipmakers expand production too quickly.

CXMT’s IPO showed how highly investors value Chinese companies linked to AI and technological self-reliance. The company must now prove that its roughly $540 billion valuation can be justified by growth in sales, profits and product quality.

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