Changxin Memory Technologies Inc. is delaying its initial public offering and will instead consider raising funds at about a 140 billion yuan ($19.5 billion) valuation, becoming the latest Chinese company to call off a debut because of volatile market conditions.

Changxin had completed a shareholder restructuring around the middle of 2023 to prepare for the potential listing, according to people familiar with the situation. But it decided to await a more favorable market after communications with regulators and prospective investors, said the people, asking not to be identified discussing a private matter.

A financing round will allow the chipmaker — one of China’s biggest manufacturers of the memory essential to computers and smartphones — to continue expanding capacity in anticipation of a rebound in global tech demand in 2024.

Like Huawei Technologies Co., Changxin is among a select few firms that embody Beijing’s ambitions to match the US technologically, particularly in the semiconductors that underpin most advances from AI to self-driving cars. Memory chips, an industry now dominated by Samsung Electronics Co., SK Hynix Inc. and Micron Technology Inc., could serve as a launchpad for more advanced semiconductor development down the road.

Read More: Chinese Chip Rival to Samsung Seeks IPO at $14.5 Billion Value

Changxin had planned to file for an IPO on Shanghai’s Nasdaq-style STAR board this year, Bloomberg News reported in April. The Hefei-based company hasn’t targeted a funding amount because Changxin has only just begun to sound out investor interest, the people said. A deal could fail to materialize if the company fails to drum up enough demand for its shares, they said. A representative for Changxin didn’t respond to requests for comment.

Still, Chinese investors have warmed to the perceived beneficiaries of Beijing’s efforts to cultivate a world-class tech industry and shake off a dependency on American products. That’s despite the inherent risk: Washington has slapped sanctions on Changxin’s main rival, Yangtze Memory Technologies Co., impeding its ability to access the American components it needs to make its chips.

Last month, a little-known startup that shares several shareholders and the same general manager with Changxin raised 39 billion yuan from state-backed investors including China Integrated Circuit Industry Investment Fund.

That investment in Changxin Xinqiao Memory Technologies Inc. was one of the largest investments by the flagship semiconductor fund, better known as Big Fund, after Beijing began a probe into its former heads for corruption about a year ago.

Changxin could move swiftly to revive its IPO plans should market conditions brighten, the people said. But it’s not alone in rescheduling a potential mega listing this year.

Swiss seed and pesticide company Syngenta announced last month it would postpone its $9 billion Shanghai IPO to the end of 2024, citing market volatility. It follows a decision by China’s securities regulator in August to slow the pace of IPOs as Chinese stock indexes are struggling amid an economic downturn.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved