Nexchip IPO Margin Subscriptions Oversubscribed by 234 Times, Cornerstone Investors Subscribe US$430 Million
Miles Bennett
Nexchip's Hong Kong IPO drew 234x margin oversubscription and US$430 million in cornerstone commitments from 20 investors — the hottest semiconductor listing in Hong Kong this year, with the July 10 debut set to test whether that frenzy translates into real secondary-market support.
234x oversubscribed — how extreme is that?
Broker margin subscriptions hit HK$164.5 billion against a public tranche of just HK$698 million, yielding an oversubscription ratio of 234.65x.
This means → for every dollar of public shares on offer, more than 234 dollars lined up to buy — short-term demand vastly outstrips supply.
Entry cost is HK$3,262.57 per board lot of 100 shares, at an offer price of HK$30–32.3. The company plans to list 216 million H-shares on July 10.
Twenty cornerstone investors — who is betting?
A total of 20 cornerstone investors committed US$430 million, spanning the chip supply chain, automakers, and financial institutions.
Industry names — JCET Group, Puxin Technology, Zhigan Micro — signal that upstream and downstream clients are locking in capacity with real money.
Chery Automobile Hong Kong's participation stands out — this reflects automakers treating foundry access as a supply-chain security measure.
Financial players — Taikang Life, GF Fund, China AMC (HK), Harvest International, Shanghai Gaoyi — provide a stabilizing anchor for the secondary market.
Where will the proceeds go?
53.6% goes to R&D on a next-generation 22 nm technology platform — the critical leap beyond the company's current 40 nm floor.
23.1% funds AI-powered smart R&D and manufacturing. In plain terms = using AI to boost chip design and production efficiency, not making AI chips themselves.
13.3% establishes an R&D and sales center in Hong Kong; 10.0% covers working capital.
What kind of company is Nexchip?
A 12-inch pure-play wafer foundry — it manufactures chips for others but designs none of its own — covering 150 nm down to 40 nm, with a 28 nm logic platform already developed.
By 2025 revenue, Frost & Sullivan ranks it the ninth-largest foundry globally and third-largest on the Chinese mainland.
From 2020 to 2025 its capacity and revenue growth ranked first among the world's top ten foundries. This means → it is the fastest-gaining challenger on the track.
Can the financials support the valuation?
Revenue for 2023–2025 came in at RMB 7.18 billion, 9.12 billion, and 10.39 billion respectively — steady compound growth.
Net profit over the same period: RMB 119 million, 482 million, and 466 million — a slight dip in 2025, signaling that revenue growth is outpacing profit growth.
In plain terms = the top line is still climbing, but margins are starting to lag behind spending. The listing-day price and trading pattern will be the real test of whether this oversubscription heat converts into lasting support.
Content is for reference only, not financial advice.