Why is Chinese DRAM maker CXMT’s IPO attracting so much attention?

The planned listing of ChangXin Memory Technologies (CXMT), the country’s leading DRAM maker, is drawing attention after a recent update of its prospectus with a sharp earnings turnaround, showing how quickly the Hefei-based company has benefited from a global DRAM shortage and rising memory prices.In the first quarter, its revenue reached 50.8 billion yuan (US$7.4 billion), up 719 per cent from a year earlier, while net profit was 33.0 billion yuan, compared with a loss of 2.83 billion yuan in the same period last year, the prospectus showed.The South China Morning Post looks at why CXMT matters, what it means for China’s broader semiconductor supply chain, how far China’s DRAM localisation has progressed, who are its major shareholders and why its profit has changed so dramatically.What is CXMT and who are its shareholders?Founded in 2016 and headquartered in Hefei, the capital city of the central province of Anhui, CXMT is widely regarded as China’s only domestic DRAM maker to have achieved mass production.Its products include DDR memory used in desktops and servers, as well as LPDDR chips used in smartphones, tablets and wearable devices. Its LPDDR products have entered the supply chains of Chinese electronics brands including Xiaomi, Oppo, Vivo, Transsion and Lenovo.CXMT’s shareholder list reflects both state support and private capital. Its largest shareholders include Hefei Qinghui Jidian Enterprise Management Partnership (21.67 per cent), Hefei Changxin Integrated Circuit, China’s so-called Big Fund Phase II, Hefei Jixin Enterprise Management Partnership and Anhui Investment Group.Most of the major shareholders are state-backed, while Hefei Jixin is an employee shareholding platform. Meanwhile, Alibaba Cloud and Alibaba (China) Network Technology together hold about 4.97 per cent, while GigaDevice holds 1.80 per cent. Alibaba Group Holding owns the SCMP.Hefei ChangXin Integrated Circuit is wholly owned by Hefei’s industrial investment arm. The mix of local state funds, national chip funds and corporate investors has made CXMT one of the most politically and commercially important listings in China’s chip sector.