By Yang Jie and Sherry Qin

Leading Chinese memory-chip maker Yangtze Memory Technologies Co. has officially begun its prelisting regulatory review process, taking a major step toward a highly anticipated initial public offering on the domestic stock market.

One of China's largest investment banks, Citic Securities, has been appointed as the lead underwriting sponsor to guide the company through the regulatory vetting process required before a public debut, according to documents Tuesday from the brokerage.

The move is a milestone for the state-backed champion, which has rapidly climbed the ranks of the global tech sector despite facing severe geopolitical headwinds and Washington-led trade restrictions.

YMTC is China's only major domestic manufacturer of 3D NAND flash memory, a cutting-edge storage technology that stacks data cells vertically like skyscrapers to cram massive amounts of data into tiny microchips.

Ranked as one of China's top tech unicorns, the company carried a valuation of about $22 billion, as assessed by the 2025 Hurun Global Unicorn List.

The memory-chip sector is highly cyclical and widely regarded as one of the most difficult and capital-intensive segments of the semiconductor industry.

For decades, the global NAND flash market remained an exclusive club dominated by a handful of American, South Korean and Japanese tech companies--Samsung Electronics, SK Hynix, Micron Technology and Kioxia--leaving China vulnerable and weak in high-end storage capabilities.

State-backed YMTC, which has garnered support from Chinese government investors, including a national chip fund, is fast narrowing the gap with industry leaders. According to recent Counterpoint Research data, its NAND flash market share by revenue grew to 11% by the end of 2025, making it the world's sixth-largest NAND supplier.

YMTC's IPO plan comes after another key domestic memory-chip maker CXMT, which focuses on dynamic random-access memory, restarted its listing process on Shanghai's Nasdaq-like STAR Market recently.

The nation's chip strategy has now evolved into a two-pronged approach, with YMTC focusing on NAND flash and CXMT on DRAM. Together, the two companies address the core needs of the global storage market.

Their coming IPOs and capacity expansion could help alleviate the severe structural supply crunch currently facing the global memory market. Insatiable demand for premium memory chips for the AI infrastructure buildout has crowded out mainstream DRAM and NAND flash production for consumer electronics and automotive supply chains.

Once certain types of Chinese-made advanced memory chips hit the market, the current supply shortage could be resolved, Jason Chen, chairman of Taiwanese electronics maker Acer, said last year.

It is only a matter of time before China achieves mass production of products such as HBM, he said, referring to high-bandwidth memory, a critical component of AI accelerators and applications.

"Once that happens, it's going to completely flip the market, which is why everyone is hesitant to aggressively expand production capacity right now," he said.

Write to Yang Jie at jie.yang@wsj.com and Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

May 19, 2026 08:38 ET (12:38 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.