Shanghai Stock Exchange pauses CXMT’s STAR Market IPO review after its financial filings expire, giving Samsung and SK hynix a brief respite
A memory product from China’s Changxin Memory Technologies (CXMT). (Photo courtesy of CXMT)
The temporary suspension of the Initial Public Offering (IPO) review for Changxin Memory Technologies (CXMT), China’s largest DRAM manufacturer, is expected to provide a short-term respite for Samsung Electronics and SK hynix. The delay in the listing increases the likelihood that CXMT’s planned production expansion will also be postponed.
According to foreign media and industry sources on April 3, the Shanghai Stock Exchange recently changed the status of CXMT’s IPO review on the STAR Market (Kechuangban) to ‘suspended’. This was necessary because the financial documents included in the listing application had expired, requiring the submission of updated materials. Under China’s IPO system, financial data loses its validity after a certain period, and the review is temporarily halted until updated documents are filed. The process is structured to resume once the materials are supplemented.
This measure is not unique to CXMT. It was reported that numerous other companies were also placed in a suspended review status for the same reason on the same day. The prevailing view is that the IPO itself has not been called off, as the review will resume after the documents are updated. However, the market is paying close attention to the fact that the delayed listing timeline will inevitably force an adjustment in the pace of its investment plans.
Originally, CXMT planned to raise approximately 29.5 billion yuan (about 6.4569 trillion won or $4.3 billion) through a listing as early as the first quarter of this year to invest in production lines and facility expansion. In particular, there was talk of plans to increase wafer input to a level of 60,000 to 70,000 sheets per month after the IPO, leading to forecasts that additional volume would enter the commodity DRAM market starting in the second half of the year.
However, with the IPO review temporarily suspended, the timeline for fundraising and production capacity expansion is now highly likely to be delayed. The industry view is that the listing date will be pushed back by several months or more, as a certain amount of time is needed to update financial documents and resume the review. Some observers even speculate that the listing could be postponed until the second half of the year.
This is expected to act as a favorable factor for Samsung Electronics and SK hynix in the short term. While the scale of CXMT’s expansion is not large enough to sway the entire global memory market, the market has viewed the timing of this additional supply as a pressure point. In particular, as commodity DRAM is sensitive to changes in supply, there has been persistent caution that an earlier-than-expected influx of new volume could affect price trends. The assessment is that these concerns have been somewhat alleviated by the delayed IPO schedule.
With DRAM prices rising sharply recently, the performance of domestic memory companies has been on an upward trend, and the reduced pressure regarding the timing of new supply is also expected to have a positive effect on profitability. According to industry sources, the current operating profit margin for DRAM, based on contract prices, is estimated to be around 80%.
However, it is difficult to say that the long-term competitive landscape of the memory industry has changed. This is because while the listing date has been delayed, the overall trend of investment and expansion is expected to continue. CXMT has been expanding its market share, primarily in its domestic market, with the backing of the Chinese government. As memory prices trend upward recently due to expanding demand from AI data centers, its foundation for growth appears to be further strengthening.
According to a Bloomberg report, CXMT’s revenue last year is estimated to have exceeded 55 billion yuan (approximately 11.9980 trillion won), an increase of about 130% compared to the previous year. Furthermore, it achieved a 5% share of the global DRAM market last year, ranking fourth in the industry behind the top three memory companies (Samsung Electronics, SK hynix, and Micron).
An industry official explained, “Originally, an expansion of 60,000 to 70,000 sheets per month was expected after the IPO, but if the listing is delayed, the investment execution will inevitably be delayed as well. While the scale of the expansion itself was not enough to shake the market, the market perceives the delay in the timing of the additional supply as a reduction of pressure.”
Kim Eun-jin
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