SHANGHAI, Dec 17 (Reuters) – MetaX Integrated Circuits shares surged 700% on their debut in Shanghai as the Chinese artificial intelligence chip maker capitalized on strong momentum from Beijing’s push to reduce reliance on chips from U.S. companies Nvidia (NVDA) and Advanced Micro Devices (AMD).
MetaX, founded by former AMD executives, raised about $600 million in an initial public offering last week, days after larger rival Moore Threads debuted with a 400% approval rating.
MetaX opened in Shanghai at 700 yuan per share, compared with the IPO price of 104.66 yuan, before soaring to 895 yuan, defying ongoing concerns about an artificial intelligence bubble in other markets. The stock closed at 829.9 yuan on the daily trading day, up 693%.
Yang Tingwu, fund manager of Tongheng Investment, said: “This is another IPO story in China where a crow turns into a phoenix.”
The surge in price “creates a huge arbitrage opportunity” for pre-IPO investors and “we could see the stock peak within the next five years,” Yang said.
Artificial intelligence (AI) chipmakers are rushing to sell Chinese stocks to take advantage of interest generated by the government’s push for local production to compete with the United States.
“Artificial intelligence and semiconductors are key areas of Sino-US technology competition,” Cathay Haitong Securities said in a report ahead of the MetaX listing. “Against the backdrop of geopolitical tensions, AI chip manufacturing has huge growth potential” as China seeks to achieve self-sufficiency.
Researchers Frost & Sullivan predict that Chinese AI chip sales will reach $189 billion by 2029, rising from $54 billion in 2026.
Graphics processing unit (GPU) maker MetaX raised 4.2 billion yuan ($596 million) in a stock offering last week that was oversubscribed by retail investors more than 4,000 times.
The IPO, China’s sixth-largest so far this year, priced the money-losing startup at 50 times 2024 sales, according to KPMG. That compared with 34x for Nvidia and 14x for AMD, MetaX said in a pre-market statement.
MetaX’s debut jumped the five-year-old startup’s value to more than 300 billion yuan ($42.58 billion) and increased the wealth of 49-year-old founder and majority shareholder Chen Weiliang.
After working at AMD Shanghai for 13 years, Mr. Chen founded MetaX with the mission of “contributing to the rejuvenation of the Chinese nation and national prosperity.” The founding team also includes former AMD engineers Li Peng and Yang Jian.
“Thanks to AMD’s DNA, the company is China’s leading GPU manufacturer,” Li Hui, an analyst at Huajin Securities, said in a report before MetaX went public.
