Chinese chip IPO sees 570x oversubscription
The Chinese company CXMT, a manufacturer of memory chips, announced the successful completion of its initial public offering (IPO) worth $8.6 billion. The company received investor demand amounting to 1.24 trillion shares for an offering of 2.17 billion shares, reflecting a subscription rate of 570 times the shares offered. Despite this strong demand, the coverage ratio was significantly lower than previous surges seen in the Chinese market, where some IPOs have exceeded 5,000 times oversubscription. The company is expected to be listed on the STAR Market of the Shanghai Stock Exchange in July, as part of Beijing's efforts to enhance self-sufficiency in the tech sector. Currently, semiconductor stocks are experiencing a decline amid worries that the wave of AI investment may be surpassing sustainable levels; the STAR Index has fallen by 25% since July. CXMT is the fourth-largest producer of DRAM chips globally, with its products used in smartphones, computers, and servers, amid ongoing market challenges and sector slowdown.
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