CanSemi Technology lists on Shenzhen's ChiNext
IPO raises about 1.2 trillion won
Beijing approves listing despite heavy losses
Legacy chip capacity set to expand
Chinese memory makers close in on Samsung, SK hynix
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China has allowed a foundry company running deep losses to list on its stock market, a move widely seen as part of Beijing's push to expand domestic semiconductor production capacity — particularly in mature-node processes where the technology barrier is lower — as Washington tightens controls on advanced chip technology and equipment exports.
CanSemi Technology, a Chinese wafer foundry, listed Tuesday on the ChiNext board of the Shenzhen Stock Exchange. ChiNext supports fundraising by growth and innovation companies, functioning similarly to South Korea's Kosdaq. The initial public offering raised approximately 6.16 billion yuan ($919 million) before any overallotment option exercise, equivalent to about 1.2 trillion won. The company's expected market capitalization stands at roughly 34.57 billion yuan, or about 6.94 trillion won.
Founded in 2017 and headquartered in Guangzhou, CanSemi Technology is a 12-inch (300mm) semiconductor foundry that handles contract manufacturing of analog chips, power management ICs, image sensors and display driver chips using mature processes ranging from 180 to 55 nanometers. Its business model is similar to that of South Korea's DB HiTek and SK Keyfoundry.
CanSemi has also been expanding into automotive electronics. According to the company's response to a second-round IPO inquiry submitted to the Shenzhen Stock Exchange in May, 18 of its contract-manufactured products have passed vehicle certification from automakers.
"For automotive and industrial power semiconductors, product certification typically takes more than one to two years, but once a supplier enters mass production, switching suppliers is difficult — allowing us to secure long-term customer relationships," the company said.
CanSemi plans to use the IPO proceeds for production equipment investment and specialized process technology development. Its two existing 12-inch factories have a combined planned capacity of 80,000 wafers per month, which the company intends to expand to 120,000 wafers per month through additional construction. It is also stepping up investment in next-generation process technologies such as silicon photonics.
Listing approved despite 6.5 billion yuan in losses
China accelerates legacy foundry buildout
'A show of confidence even under US sanctions'
What stands out is that CanSemi was permitted to list despite posting substantial losses. The company recorded net losses attributable to controlling shareholders of 1.92 billion yuan, 2.25 billion yuan and 2.35 billion yuan in 2023, 2024 and 2025, respectively. Cumulative net losses over those three years reached approximately 6.52 billion yuan. Sales last year came to about 2.58 billion yuan, up 53.6 percent from the prior year, yet the company has still not turned a profit.
CanSemi even disclosed in its listing prospectus that depreciation on manufacturing equipment and research and development costs mean a return to profitability is unlikely before 2029 at the earliest. Even so, China has been lowering the bar for listing companies with growth potential and technological capability as it seeks to expand its domestic semiconductor industry.
The underlying logic appears to be that concentrating investment now to boost output — at a time when supply falls well short of demand — is the way to gain a competitive edge. Xinlian Integrated, an automotive power semiconductor foundry, similarly listed on the Shanghai Stock Exchange's STAR Market in 2023 despite being in the red that year.
China's foundry industry is already showing momentum. According to market research firm Counterpoint Research, TSMC held a 73 percent share of the global pure-play foundry market in the second quarter of this year, followed by Samsung Electronics at 7 percent and China's SMIC at 5 percent. SMIC's sales rose 36 percent year on year in the same period, while fellow Chinese chipmakers Hua Hong Semiconductor and Nexchip posted revenue gains of 17 percent and 21 percent, respectively.
The Center for Strategic and International Studies (CSIS), a US think tank, noted that "the more the three major memory companies shift capacity toward HBM and AI-optimized memory, the greater the role lower-cost Chinese suppliers can play in meeting demand for commodity DRAM."
Against that backdrop, SK Group Chairman Chey Tae-won said Sunday in Shanghai that "if China or US-based Micron expands capacity at a faster pace, South Korea's market share will shrink. We need to scale up quickly."
The semiconductor industry views CanSemi's listing as one of China's self-help measures in response to US chip sanctions. While SMIC, China's largest foundry, is pursuing advanced-node development, US export controls on semiconductor equipment have hampered its technological progress — pushing China to build out capacity in mature processes where the technology barrier is comparatively low.
SMIC's capacity alone is seen as insufficient to meet domestic semiconductor demand, prompting Beijing to cultivate new foundry companies and accelerate supply chain self-sufficiency.
"CanSemi's stock market debut is an example of how rapidly China's mature-node foundry industry is growing," an industry official said. "It also looks like a show of confidence that China can continue its semiconductor localization drive even under US sanctions."
The official added that "since technological constraints in advanced processes remain significant, we need to keep a close eye on how China's expanding mature-node capacity will reshape the competitive landscape of the global semiconductor market."
Chinese memory makers accelerate chase of Samsung, SK hynix
CXMT: '4F² DRAM to launch by year-end'
China's semiconductor ambitions are accelerating in memory chips as well. CXMT CEO Cao Kanyu said Saturday at the Fourth Integrated Circuit and Chiplet Conference in Shanghai that the company would launch a next-generation DDR5 RDIMM server memory module using a 4F² DRAM architecture by the end of this year.
The 4F² structure can theoretically reduce memory cell area by about 33 percent compared with the mainstream 6F² design. Both Samsung Electronics and SK hynix are developing 4F² DRAM but have yet to announce mass production plans; the industry expects Samsung Electronics to begin mass production around 2028.
CXMT's choice of server memory as the first product to adopt the next-generation DRAM architecture is being read as a direct challenge to the high-value memory market dominated by Samsung Electronics and SK hynix.
Cao also claimed that CXMT holds more than 300 publicly disclosed patents in the relevant field — more than any overseas competitor. If CXMT delivers on its plan to release the product this year, some analysts say it could pull ahead of South Korean memory makers technologically.
go@heraldcorp.com
