The Chinese chipmaker MetaX Integrated Circuits shot up nearly 700 percent on Wednesday, in its debut in the Shanghai market following the company raising close to $600 million in its initial public offering.
However, the shares, which were priced at 104.66 yuan at the IPO, had dramatically increased to over 835 yuan on the debut, representing a 697 percent rise.
Unlike Moore Threads, which was a strong launch at the beginning of the month, MetaX creates graphics processing units to work on artificial intelligence applications, which have a booming market with an increase in the use of AI services.
MetaX belongs to a larger group of local chipmakers assembling AI processors, and it becomes part of the trend where Beijing aims to lessen reliance on U.S. chips after Washington imposed technology restrictions on exporting high-end technology to China.
Washington has levied export restrictions on U.S. chip giant Nvidia and has blocked the sale in China of its most advanced AI chips.
More recent Chinese entrants have also started to venture into the AI industry, including Enflame Technology and Biren Technology, which seek to win a portion of the billions of graphics processing unit, or GPU, demand that Nvidia no longer serves.
In a bid to achieve higher levels of AI independence, Chinese regulators have been clearing additional semiconductor IPOs.
In early March this year, shares of Moore Threads, a Beijing-based manufacturer of GPUs commonly known as “China’s Nvidia,” went up over 400 percent on its Shanghai trading debut after it listed at $1.1 billion.
Macquarie equity analyst Eugene Hsiao opined that the current interest of investors in Chinese AI-chip IPOs, including MetaX, is informed in part by the longer-term hope of China developing a self-reliant semiconductor sector as relations with the U.S. remain strained.
He said, “For that to work, you need these players. You need names like Moore Threads, Meta X, etc.”
“So I think when investors are looking at these IPOs, they implicitly are thinking about the nationalistic element,” he added, citing that the main driver of the frenzy was the firms’ growth potential.
