Zhaoxin Integrated Aims to Raise 41.69 Billion Yuan in STAR Market IPO

Shanghai-based Zhaoxin Integrated Circuit Co., Ltd. (Zhaoxin Integrated) has received approval for its initial public offering (IPO) on the Science and Technology Innovation Board (STAR Market) of the Shanghai Stock Exchange. The company, which specializes in the research, design, and sale of high-end general-purpose processors and accompanying chips, is seeking to raise 41.69 billion yuan. The underwriters for the IPO are Guotai Junan Securities and Dongfang Securities.

Zhaoxin Integrated's core business revolves around the development of x86 architecture CPUs, which are known for their high technical barriers, complex structures, and dominant market share. The company has mastered the core technologies required for the design and development of general-purpose processors and accompanying chips, covering critical areas such as processor core microarchitecture and implementation technologies. This positions Zhaoxin Integrated as a leading domestic enterprise capable of designing CPUs that cater to multiple domains, including desktop PCs, servers, workstations, and embedded systems, while maintaining compatibility with the x86 instruction set.

The x86 architecture CPU is a cornerstone of information security and is considered the "brain" of information devices. Globally, x86 architecture processors, backed by mature and mainstream ecosystems, dominate the desktop PC and server computing markets. The market is primarily controlled by Intel and AMD, creating a duopoly.

Domestic CPU manufacturers, due to varying product positioning and technological origins, have adopted different technological paths. Zhaoxin Integrated's independently developed general-purpose processor products are characterized by high efficiency, compatibility, and security. These products have achieved significant breakthroughs in key industry markets. By 2024, Zhaoxin Integrated's CPUs will be the most widely used in the domestic terminal shipments of leading desktop PC manufacturers.

In terms of financial performance, Zhaoxin Integrated reported revenues of approximately 3.4 billion yuan, 5.55 billion yuan, and 8.89 billion yuan for the years 2022, 2023, and 2024, respectively. However, the company reported net losses of approximately 7.27 billion yuan, 6.76 billion yuan, and 9.51 billion yuan for the same periods. The financial data indicates that while the company is experiencing growth in revenue, it is also facing significant financial challenges, as evidenced by the substantial net losses reported over the past three years.

Zhaoxin Integrated's IPO on the STAR Market represents a significant milestone for the company, as it seeks to leverage the capital raised to further its research and development efforts in the x86 architecture CPU market. The company's ability to design CPUs that are compatible with the x86 instruction set and cater to multiple domains positions it as a strong competitor in the global CPU market. However, the company's financial performance raises questions about its ability to sustain growth and achieve profitability in the long term. As Zhaoxin Integrated navigates the challenges of the CPU market, its success will depend on its ability to innovate and adapt to the rapidly evolving technological landscape.