- A consortium of state-backed funds and private investors turned a 2021 investment in CXMT into one of China’s biggest semiconductor investment wins
- The payoff highlights how Ningbo is building a long-term venture capital ecosystem around strategic technologies
Five years after placing a bet on a little-known domestic memory chip startup, a group of investors from Zhejiang’s Ningbo has emerged as one of the biggest beneficiaries of China’s push for semiconductor self-reliance, with a paper gain of more than 27 billion yuan ($4 billion).
The windfall came after DRAM maker CXMT debuted on Shanghai’s STAR Market on July 27. The company closed its first trading day at 49 yuan per share, up 465.82% from its IPO price, giving it a market capitalization of 3.28 trillion yuan.
At the center of the investment was Yanchuang Dexin Venture Capital Fund (燕创德鑫创投基金), managed by Ningbo Yanchuang Capital Group (燕创集团). In 2021, the fund invested 1.32 billion yuan in CXMT’s Series B round, when the company’s post-money valuation was about 75 billion yuan.
Following the IPO, the fund held a 0.88% stake in CXMT. Based on the market capitalization on the first day of trading, the stake was worth about 28.9 billion yuan, representing an unrealized gain of more than 27.5 billion yuan.
20x return on investment
The investor group behind the fund reflects Ningbo’s broader capital ecosystem, combining local state-owned capital, industrial companies and private investors.
Through equity tracing, participants include Ningbo-based public companies such as Langdi Group, Shimao Investment, David Medical and Riyue Group, as well as local state-owned investment vehicles including Ningbo Industrial Investment Group, Ningbo Tongshang Holding Group and Xiangshan Industrial Investment Group.
Among them, Langdi Group invested 80 million yuan and now sits on a paper gain of more than 1.6 billion yuan, while Ningbo Industrial Investment Group’s 48 million yuan investment has generated an unrealized gain of nearly 1 billion yuan. Each transaction now translates into a return of over 20 times.
Alibaba has emerged another major beneficiary of CXMT’s listing. Through Alibaba Cloud and Alibaba Network, the company holds nearly 5% of CXMT, following cumulative investment of about 7.6 billion yuan.
Based on CXMT’s closing valuation, Alibaba’s stake is worth more than 160 billion yuan, representing an unrealized gain of over 155 billion yuan.
Betting early on a long-cycle technology race
The CXMT investment was far from a typical venture capital play. In 2021, the global DRAM market was dominated by Samsung Electronics, SK hynix and Micron Technology, while China’s domestic DRAM production capacity was virtually nonexistent.
For Ningbo’s investors, the decision represented a commitment to a sector characterized by high capital requirements, long development cycles and uncertain returns.
Rather than seeking a quick exit, the consortium positioned itself as a long-term partner in a strategic technology race.
The investment reflects the role of “patient capital” in supporting industries where commercial success often requires years of research, manufacturing expansion and ecosystem building.
CXMT’s IPO also marks the 20th listing achieved by Ningbo Yanchuang Group over the past 11 years, highlighting the maturation of the city’s venture capital network.
Long-horizon investment
The success of the CXMT investment illustrates a broader shift in Ningbo’s approach to capital deployment. Local investors are moving beyond traditional financial returns toward deeper involvement in industrial development.
The model combines the strengths of government-backed funds, private enterprises and professional venture capital firms: state capital provides long-term stability, industrial investors contribute sector knowledge and networks, while venture funds connect startups with broader resources.
As China accelerates investment in strategic technologies, Ningbo’s experience offers an example of how local capital ecosystems can support national industrial priorities—not simply by financing companies, but by accompanying them through long development cycles.
