Chinese chip manufacturer Changxin Memory Technologies Inc. has postponed its initial public offering and currently has plans to explore the possibility of raising funds worth 140 billion yuan ($19.5 billion).
The media reports that the mentioned company has made the specified decision due to market conditions that currently show no signs of stability. Journalists, citing insiders, report that the chip manufacturer carried out a restructuring of shareholders around the middle of this year. This was done in preparation for a potential listing. But at the beginning of winter, the company decided that current market conditions were not favorable for an initial public offering.
Media insiders claim that the firm abandoned the listing after communicating with Chinese regulators and potential shareholders. The journalists’ informants used the right of anonymity since this issue is being discussed privately and has not yet been identified at an official level.
The funding round, which is currently being considered by chipmaker, may provide a resource for expanding production capacity. This issue is particularly relevant on the eve of 2024, which many experts have already called the period of the beginning of the recovery of global demand for technology. At the same time, this point of view is an assumption and cannot be characterized as a guaranteed scenario.
Changxin Memory Technologies is currently one of the largest Chinese manufacturers of memory microcircuits, which are essential for smartphones and computers. This company is an important player in the Asian country’s efforts to achieve technological sovereignty and achieve a level of capabilities in the relevant industry that is competitive compared to the capacities of the United States. In the context of Beijing’s mentioned aspirations, the semiconductor sector is of the greatest importance, creating products necessary for the most innovative solutions, including artificial intelligence systems and self-driving cars.
Currently, the sphere of memory chips is dominated by Samsung Electronics Co., SK Hynix Inc., and Micron Technology Inc. The microcircuits data sector may become a platform for more advanced semiconductors in the future.
In April, the media reported on Changxin Memory Technologies’ intention to apply for an IPO on the Shanghai STAR board exchange in the style of Nasdaq.
The company has not yet been able to determine the amount of financing. Insiders reported that the firm has just begun to identify the interests of investors. According to informants, the deal may not take place if the company does not form a sufficient level of demand for its shares.
A representative of Changxin Memory Technologies did not respond to media inquiries regarding the decision on the initial public offering of shares.
Currently, allegations are circulating in the information space that Chinese investors positively assess the prospects of the beneficiaries of Beijing’s desire to create a world-class technology industry and get rid of dependence on Washington in this sphere. The risk of sanctions within the framework of these sentiments is not a deterrent. Washington has imposed restrictions on Changxin Memory Technologies’ main competitor, which is Yangtze Memory Technologies Co. This company has lost access to American components that are necessary for the production of chips.
Last month, Chinese startup Changxin Xinqiao Memory Technologies Inc. was able to raise 39 billion yuan ($5.4 billion). These funds were received from investors supported by the government of an Asian country. The Chinese Integrated Circuit Industry Investment Fund participated in the raising financing process.
Canceling the listing of Changxin Memory Technologies is not the first such decision this year. Last month, Syngenta, a Swiss seed and pesticide company, announced that it would postpone its initial public offering in Shanghai worth $9 billion until the end of 2024. The firm explained its decision by market volatility.
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