China’s biggest memory chip manufacturer, ChangXin Memory Technologies (CXMT), is planning an initial public offering in Shanghai as soon as the first quarter of next year, Reuters reported, amidst an AI-driven memory shortage that has driven up revenues for companies in the sector.

CXMT is targeting a valuation of up to 300 billion yuan ($42bn, £31.5bn), the report said.

Two sources told the news agency CXMT was looking to raise 20bn yuan to 40bn yuan from the offering, while a third said the firm aimed to raise 30bn yuan and could circulate its prospectus to investors as early as next month, with sources adding that the timeline, offer size, and valuation could change.

Self-sufficiency drive

CXMT’s offering is expected to see strong demand from domestic investors looking to back China’s drive for increased self-sufficiency in high-tech areas such as semiconductors.

Increasing US export controls on chips, including the high-bandwidth memory (HBM) chips that drive advanced AI accelerators, have spurred a government-backed push for domestic firms such as CXMT to fill the gap.

CXMT is building an HBM back-end packaging fab in Shanghai that aims to start production by the end of next year with an initial capacity of about 30,000 wafers per month, Reuters said.

The firm aims to start mass production of fourth-generation HBM chips, known as HBM3, next year, according to Canadian research firm TechInsights.

If it begins producing HBM3 in the fourth quarter of 2026 using a 16nm G4 manufacturing process, this would be about four years behind SK Hynix, which is currently preparing to mass-produce HBM4 chips, TechInsights said.

IPO progress

Earlier this month CXMT said in a filing with the China Securities Regulatory Commission (CSRC) that it had resolved issues related to electing employee representative directors and identifying state-owned shareholders, and was proceeding to conduct further reviews to advance its IPO process.

In July the Hefei-based company completed its IPO counselling recordation, a formal filing of pre-listing guidance with the CSRC that is a prerequisite for companies looking to list in mainland China.

Founded in 2016 with government backing, CXMT is currently challenging memory-chip market leaders SK Hynix, Samsung Electronics and Micron with a 16GB chip using DDR5 memory technology and is manufactured with a 16nm process, TechInsights said.

Research firm Counterpoint said it expected CXMT to increase its market share for DDR5 and LPDDR5 memory chips from under 1 percent in the first quarter to 7 percent and 9 percent, respectively, by the end of the year.

Memory crunch

Counterpoint said it expected CXMT’s overall chip shipments to increase by nearly 50 percent year-on-year this year, in a sign of the surge in chip demand fuelled by the deployment of AI infrastructure.

Beijing-based Moore Threads, a developer of graphics processing units that can be used as AI accelerators, in late September received approval from the Shanghai Stock Exchange to list on the city’s Star Market.