How China’s ‘Hefei model’ spawned a chipmaker’s multibillion-dollar IPO plan
City government has leveraged over 220 billion yuan in state-owned capital to drive project investment in emerging industrial clusters
At Changxin Memory Technologies’ headquarters in Hefei, the capital of central China’s Anhui province, the sprawling production facilities seem to reflect a broader, citywide optimism.
While pre-IPO estimates value the chipmaker at roughly 150 billion yuan (US$22.2 billion), market analysts project that once public trading begins, CXMT’s market capitalisation could exceed 1 trillion yuan, providing the ultimate validation of the “Hefei model”.
Formerly dubbed “China’s most aggressive venture capitalist”, Hefei’s city government provided enormous backing for CXMT’s quest to become a top memory chipmaker, helping to make the city a poster child for China’s technological progress.
A magnet for tech firms
Hefei, however, stepped in with conviction. In 2016, the city took an 80 per cent stake in the first phase of a 12-inch memory wafer manufacturing base project that cost 150 billion yuan – Anhui’s largest single industrial investment project at the time.