Chinese Chipmaker CXMT Names CICC And China Securities As Sponsors For Their IPO

Changxin Memory Technologies Inc (CXMT), a Chinese chipmaker, has named investment banks CICC and China Securities as sponsors for its planned domestic initial public offering (IPO), according to two people familiar with the matter.

According to the sources, a handful of other local investment banks are expected to play more junior roles in the deal, and bookrunners for the offering have yet to be determined.

Earlier this week, a US lawmaker asked the Commerce Department to impose trade restrictions on CXMT after Beijing prohibited the sale of some chips manufactured by US-based Micron Technology Inc.

Analysts believe CXMT's chips are two to three generations behind industry leaders Micron, Samsung, and SK Hynix, but the company will benefit the most if Micron is barred from China's massive chip market.

The proposed IPO comes as diplomatic and trade tensions between China and the United States escalate.

In an effort to slow China's technological advances, Washington has sought to limit chip-making equipment exports to China by requiring licences for US companies to export advanced chips and chip-making equipment.

CXMT will join a growing list of Chinese chipmakers looking to go public on the Chinese mainland.            

Hua Hong Semiconductor Ltd, a Chinese chipmaker, announced last week that it had received Shanghai Stock Exchange approval for its $2.6 billion share listing, which is expected to be one of the country's largest this year.

In a domestic listing, companies will formally file for a float after being instructed on the IPO process by advisers.

If CXMT goes public, it will add to a busy year for IPOs in China, as companies renew their plans after the world's second-largest economy reopened after three years of COVID-induced lockdown.