Canada – 2026/05/23: In this illustrated photo, the CXMT (ChangXin Memory Technologies) logo is displayed on a smartphone screen. (Photo illustration: Thomas Fuller/SOPA Images/LightRocket, Getty Images)
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Changxin Memory Technologies’ mass listing has raised concerns that the company’s market debut will drain cash from Chinese stocks, as investors raise money to snap up some of the country’s biggest memory chip makers.
The Shanghai Star market listing, scheduled for July 27, has become the latest focus for investors after Chinese technology stocks tumbled in recent trading. CXMT raised $8.6 billion in Asia’s largest IPO so far this year.
Tim Sun, a senior researcher at financial services firm Hashkey Group, said the listing has heightened concerns about a liquidity crunch as investors expect CXMT’s valuation to quickly exceed 1 trillion yuan ($139 billion) after the listing.
“Once it exceeds 1 trillion yuan, CXMT will become a major heavyweight in the STAR market and semiconductor index, and index funds, active funds and sector-specific funds will be forced to reallocate towards CXMT,” Sun said.
That has prompted investors to reposition in advance, putting pressure on sectors that have traditionally led the rally, including memory chips, semiconductor equipment and domestic substitutes.
The STAR 50 index, which tracks the largest and most liquid companies listed on Shanghai’s technology-heavy STAR market, fell nearly 20% this quarter.
Peter Alexander, founder of Z Ben Advisors, also said that IPO preparations are pulling money from the secondary market. “There is no question that capital is being pulled from the market in preparation for the listing of (CXMT) shares.”
Alexander expects strong initial demand, with “potentially a significant increase in the stock price on the first day of trading, and perhaps a significant increase in the stock price on the second day” before the stock and the overall market settle into a “new equilibrium.”
But analysts stressed that while IPOs are an “amplifying factor” that exacerbates the decline, they are not the root cause.
“The main reason for this decline is the crowded positioning and high leverage level within the A-share tech sector,” Sun said, adding that the correction in South Korean semiconductor stocks spilled over into global semiconductor valuations and triggered profit-taking in China.
Benjamin Cavender, managing director at CMR Consulting, said it was “plausible” that the deal had a near-term liquidity effect, especially given its size, for STAR markets, semiconductors and AI stocks. However, “CXMT may be acting as a catalyst to focus existing concerns rather than being the cause of the original decline in stock prices.”
Cavender said the phenomenon is similar to the “cash call” effect seen during big IPOs, when investors step out of publicly traded companies to raise cash for highly anticipated initial public offerings. China is particularly vulnerable because of its large retail investor base and lottery-style IPO allocation system, he added.
China’s stock market is dominated by retail investors, who account for about 90% of daily trading, compared to about 25% in the United States, according to HSBC.
Mr Cavender said the direct impact on liquidity would be temporary and the cash would likely return to the market once allocations are completed and trading begins. But a series of large IPOs could have a longer-term impact.
“If investors conclude that the market needs to continue absorbing the huge pipeline of semiconductor, AI and national champion products, the impact could be long-lasting, not because one IPO will permanently destroy liquidity, but because it will change the balance of supply and demand for high-growth Chinese stocks,” Cavender said.
Counterpoint Research, on the other hand, views IPOs through a long-term industry lens. The company expects the funds raised will accelerate CXMT’s capacity expansion and strengthen its position in the global memory market.
The listing may temporarily change the flow of capital, but it also marks the emergence of a significant new competitor in dynamic random access memory (DRAM), a type of semiconductor memory used to temporarily store data while computers, smartphones and AI servers operate.
