YMTC Cedes Foundry Unit Control Ahead of Mega IPO

Chinese memory chipmaker Yangtze Memory Technologies Co. (YMTC) is ceding control of its foundry unit to a state-backed fund, streamlining operations ahead of a blockbuster initial public offering on Shanghai’s STAR Market that could value the company at approximately 300 billion yuan ($44 billion), according to Caixin Global.

The transaction, disclosed in a June 17 regulatory filing with the Chongqing Market Supervision Administration, involves YMTC selling a 39% stake in Wuhan Xinxin Semiconductor Manufacturing Co. Ltd. to Wuhan Optics Valley Semiconductor Industry Investment Co., a local state-owned investment platform. The sale reduces YMTC’s holding from 68.2% and transfers control to the state-backed buyer, which will manage a 47.9% stake alongside its concert parties.

Strategic Restructuring

The divestment comes just weeks after Wuhan Xinxin’s own STAR Market IPO was terminated on May 19, 2026, following a voluntary withdrawal after an on-site regulatory inspection. On the same day, ChangKong Group (长控集团), YMTC’s parent company, officially began its IPO tutoring process with Citic Securities and China Securities.

Industry analysts view the foundry unit divestment as a strategic move to streamline YMTC for its public listing. As Caixin reported in an in-depth analysis, the back-to-back IPO plans of China’s memory chipmakers have raised questions about market liquidity and valuation.

“The termination of Wuhan Xinxin’s IPO is likely not an isolated failure, but part of an asset restructuring and strategic re-planning,” Sun Huaqiu of the Era Business Research Institute told QQ. “Coordinating ChangKong Group’s overall listing as a unified capital operation platform may better align with the internal logic of large-scale integration in the national integrated circuit industry.”

Ownership and Buyer Details

Pre-transaction, ChangKong Group held 68.1937% of Wuhan Xinxin with sole control. Post-transaction, the Optics Valley consortium will directly and indirectly control 47.8846%, assuming sole control. The buyer, Wuhan Optics Valley Semiconductor Industry Investment Co., was established on May 25, 2023, in Wuhan. Its ultimate controller is Hubei Science & Technology Investment Group (湖北科投), which is owned by the Wuhan East Lake High-Tech Development Zone Administrative Committee.

YMTC’s Market Position and IPO Prospects

YMTC has emerged as a formidable player in the global semiconductor landscape. The company held approximately 13% of the global NAND flash market by the first quarter of 2026, securing a top-tier position among industry leaders. Caixin reported that YMTC’s first-quarter 2026 revenue surged nearly 445% year-on-year, driven by AI data center demand, lifting its market share from 8% a year earlier.

Market forecasts value YMTC at around 300 billion yuan for its upcoming IPO. Guosheng Securities noted in a research report that YMTC is expected to submit its formal listing application as early as mid-June 2026. The company’s revenue exceeded 20 billion yuan in the first quarter of 2026, doubling year-on-year.

Background: Sanctions and Self-Sufficiency

YMTC operates under significant U.S. sanctions pressure. The company was added to the U.S. Commerce Department’s Entity List in December 2022, following October 2022 export controls targeting advanced memory chip production equipment. Despite these restrictions, YMTC has managed to nearly triple its global market share from approximately 4% to 13%.

As Caixin noted in its coverage of YMTC’s parent restructuring in September 2025, the company is a centerpiece of Beijing’s semiconductor self-sufficiency ambitions. YMTC is China’s only company capable of end-to-end 3D NAND flash chip manufacturing, and its technology milestone — mass production of 232-layer 3D NAND flash — placed it among a select group of global players including Samsung, SK Hynix, Kioxia, and Micron.

Gartner VP Roger Sheng offered a measured assessment: “YMTC has made significant progress, but there remains a significant capacity gap between Chinese memory leaders and their global counterparts, pointing to substantial room for expansion.”

What’s Next

The foundry unit divestment removes a key regulatory hurdle — related-party transactions and control ambiguity — that could have complicated YMTC’s STAR Market listing. With Wuhan Xinxin now under state control, the subsidiary can continue operations without the pressure of public market scrutiny, potentially restructuring its business away from loss-making segments.

The IPO comes amid a memory chip “supercycle” driven by AI demand, with global chip sales expected to approach 9 trillion yuan in 2026, up 64% year-on-year. YMTC plans to build two more wafer fabs after Phase 3, potentially doubling total production capacity and reshaping global NAND flash market dynamics.

However, significant challenges remain. YMTC’s monthly capacity of 140,000 wafers trails far behind Samsung’s approximately 410,000 and Western Digital’s roughly 400,000. U.S. export controls also remain a significant risk factor, potentially limiting YMTC’s access to advanced equipment and technology as it scales up.

All eyes are now on whether YMTC will submit its formal listing application in the coming weeks, and what valuation the market will ultimately assign to China’s most prominent memory chip champion.