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Shares of Chinese chipmaker MetaX Integrated Circuits soared about 700% in its market debut in Shanghai on Wednesday after the company raised nearly $600 million in an initial public offering.
The stock price at the time of IPO was 104.66 yuan, but it rose to more than 835 yuan at the time of debut, marking a 697% increase.
Similar to Moore Threads, which had a strong debut earlier in the month, MetaX develops graphics processing units for artificial intelligence applications, entering a field that is booming due to increased adoption of AI services.
MetaX is part of a growing group of local chipmakers developing AI processors, reflecting the Chinese government’s move to reduce its reliance on American chips in the wake of U.S. restrictions on exports of high-end technology to China.
The US government has imposed export restrictions on US semiconductor giant Nvidia, prohibiting it from selling cutting-edge AI chips to China.
Emerging Chinese companies such as Enflame Technology and Biren Technology are also entering the AI space, aiming to capture a share of the billions of graphics processing unit (GPU) demands that Nvidia no longer provides. Chinese regulators are also approving more semiconductor IPOs to increase AI independence.
Earlier this month, shares of Beijing-based GPU maker Moore Thread, also known as “China’s Nvidia,” soared more than 400% on its Shanghai debut after going public for $1.1 billion.
Macquarie equity analyst Eugene Xiao said investor enthusiasm for Chinese AI chip IPOs such as Metax was partly shaped by long-term expectations that China would build a self-sufficient semiconductor ecosystem amid ongoing tensions with the United States.
“We need these players for it to work. We need names like Moore Threads and Meta-X,” he said.
“So when investors are looking at these IPOs, I think they are implicitly thinking about the nationalist element,” Xiao noted, adding that the main driver of the enthusiasm was the growth potential of the companies.
—CNBC’s Dylan Butts contributed to this article.
