Two Chinese chip firms plan US$1.7 billion IPOs, bet US export curbs to spur growth
Beijing-based Moore Threads plans to raise 8 billion yuan, while Shanghai-based MetaX seeks 3.9 billion yuan, according to their IPO prospectuses filed on Monday (Jun 30). Both companies intend to list on Shanghai's STAR Market, the tech-focused board of the Shanghai Stock Exchange.
Their fundraising plans underscore growing efforts by Chinese chipmakers to capitalise on Beijing's push to develop domestic champions in graphics processing units (GPU), which are crucial for AI development.
Reuters reported last week that Biren Technology, another Chinese AI chipmaker, raised about 1.5 billion yuan in fresh funding and was preparing for a Hong Kong IPO.
Developing domestic chip champions has become increasingly urgent for Beijing, as the US tightens export restrictions, with the latest rules implemented in April banning Nvidia's H20 chips, one of its most popular chips, from being shipped to China.
The US has also imposed restrictions since last year that prevent Chinese AI chip designers from accessing advanced global foundries like Taiwan Semiconductor Manufacturing for producing cutting-edge semiconductors.
Moore Threads and MetaX both cited US sanctions as a major risk to their development but also emphasised the restrictions could create significant market opportunities.
"US restrictions on high-end GPU exports to China are prompting Chinese companies to accelerate domestic substitution processes," Moore Threads said. The company was added to the US Entity List in late 2023 and is barred from partnering with TSMC.
MetaX said "geopolitical pressures are forcing relevant domestic clients to use domestically-produced GPU products, which will help domestic GPU manufacturers establish closer ties with local customers and suppliers."
The two firms design GPUs to compete with Nvidia products and have reported steep losses over the last three years, which they largely attributed to heavy research and development spending.
Moore Threads generated revenue of 438 million yuan in 2024 but posted a loss of 1.49 billion yuan, adding to losses of 1.67 billion yuan in 2023 and 1.84 billion yuan in 2022.
MetaX posted 2024 revenue of 743 million yuan against a 1.4 billion yuan loss, following losses of 871 million yuan in 2023 and 777 million yuan in 2022.
"Moore Threads and MetaX are both considered leading GPU firms in China, and accessing the capital market in China would be crucial for them to continue their research and development," said He Hui, research director on semiconductors at Omdia.
China's drive to achieve higher self-sufficiency in chips would help domestic GPU firms achieve economies of scale, crucial to generating higher revenue and profits, He said.
Both companies were founded in 2020 by executives who previously worked at major US chip firms.
MetaX was founded by former AMD employees, including Chairman Chen Weiliang, who previously served as the US chipmaker's global head of GPU product line design.
Moore Threads was established by former Nvidia employees, including Chairman Zhang Jianzhong, who previously held the role of general manager for the AI chip giant's China operations.
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