Nov 4 (Reuters) - Flash-memory chipmaker Yangtze Memory Technologies Co has put its Shanghai IPO on hold, according to a company memo and three people with knowledge of the matter, as Beijing tightens
approval for share sales in a struggling stock market.
CCSH Corporation, YMTC's parent, filed for its IPO in August on Shanghai's Nasdaq-style STAR market, aiming to raise 33 billion yuan ($4.9 billion), which would have been Asia's second-largest equity offering this year.
The company, one of China's chip champions that Beijing needs for technological self-reliance, was planning to kick off strategic share placement for the IPO in late October and early November.
YMTC has put that process on hold due to "various factors", according to a memo the company sent to its staff seen by Reuters that did not elaborate on the factors. The delay, which two people said could last several months, has not been reported previously.
The IPO delay could throw a wrench in the capacity expansion plans of China's largest maker of NAND chips, used to store data in phones, computers and data centres.
YMTC's fast growth since the advent of a biting, global memory chip shortage last year has allowed it to gain market share in China from established NAND suppliers like South Korea's Samsung Electronics and SK Hynix.
YMTC will likely go public in the first half of 2027, subject to market conditions, the two people said on condition of anonymity, as tech stocks have been the main target of savage selloffs over the past few months.
As per the Shanghai Stock Exchange's website, the company's IPO application is in the so-called "inquiry stage", a routine procedure it needs to clear before being presented to the exchange's listing committee for approval.
YMTC did not respond to a request for comment on the IPO freeze.
The blue-chip CSI300 Index in China slumped 8.5% in October, its worst monthly performance in more than a decade. The STAR50 index of Shanghai-listed chip and AI firms tumbled 40% from its July peak through the end of last month.
Overall, regulatory scrutiny of new listings in China has also tightened over the past few weeks as market conditions have weakened, according to three separate people with knowledge of the matter.
The China Securities Regulatory Commission has given informal guidance to investment banks to slow down IPOs by AI and chip companies, another four people with knowledge of the matter said.
The CSRC did not respond to a request for comment.
China's securities regulator has told investment banks to pause IPOs and has suspended large share sales by existing shareholders until markets recover, the Financial Times reported on Tuesday, citing people with knowledge of the discussions.
TECH FUNDRAISING DELAYS
In September, Chinese authorities slowed a rush of humanoid robot firms' IPOs after a frenzy that saw Unitree shares soar more than fivefold on debut before slumping, Reuters reported, citing people familiar with the matter.
The latest move by the CSRC extends the tightening to the AI and chip sectors, which turbocharged fundraising in China over the past year amid Beijing's push for self-reliance and companies' scramble to compete with their US rivals.
AI and chip companies rely heavily on funding to research and develop better models and products. A pause on their IPO plans would also affect exits by private equity and venture capital investors who have invested in these companies.
China's large language model developers DeepSeek and Moonshot are among a slew of technology companies that are planning to list onshore and in Hong Kong, Reuters has reported.
Baidu's chip unit Kunlunxin also filed confidentially for a Hong Kong IPO, the search engine giant said in January. Kunlunxin also began pre-IPO tutoring for a domestic listing, according to a CSRC disclosure in May.
DeepSeek and Moonshot did not immediately respond to requests for comment. Baidu declined to comment on Kunlunxin's IPO plans.
Globally, a number of data centre IPOs have been pulled or delayed in recent weeks as investors reassess whether AI-related offerings can generate returns that justify soaring spending on computing power, land and energy.
Notwithstanding the regulatory guidance in China, analysts said some companies might also prefer to delay their equity raising plans as global volatility for stocks in the sector weighs on valuations and investor demand.
"This environment poses new challenges for companies planning to go public in 2027," said Kenny Ng, a strategist at China Everbright Securities International in Hong Kong.
"It could likely prompt pipeline candidates to hold off on their listing plans until market sentiment shows clear signs of improvement."
(Reporting by Beijing and Hong Kong newsrooms and Fanny Potkin in Singapore; Editing by Sumeet Chatterjee, Saad Sayeed and Jamie Freed)
