Montage's Public Offering and Early Investment
Chinese chipmaker Montage is planning a $10 billion IPO in Hong Kong. Alibaba, along with JPMorgan Asset Management, is participating as an early investor. They are joining as cornerstone investors, signifying their commitment to purchase shares before the public offering and their agreement to hold the stock for a specified period.
The listing is anticipated to generate approximately $900 million, with potential for additional funds if the overallotment option is exercised by the banks. Other notable investors securing early allocations include Aberdeen, Mirae Asset Securities, and UBS.
Montage's shares are already traded in Shanghai, where they experienced a 73% increase in value during 2025. The company is expected to open orders for the Hong Kong sale as early as Friday, with trading potentially commencing later this month.
Financial Performance and Growth Projections
In 2024, Montage reported a profit of 1.4 billion yuan, which translates to roughly $196 million. Analysts project this figure could rise to 2.3 billion yuan in 2025 and further increase to 3.3 billion yuan in 2026.
China's Drive for Domestic Chip Equipment Manufacturing
The Hong Kong IPO takes place amid a record-breaking start to the year for new listings in the city. In the first two weeks of 2026, IPOs in Hong Kong raised $4.3 billion, largely fueled by Chinese companies involved in artificial intelligence. The recovery of the market through 2025 has seen a return of large investors, leading to a resurgence of cornerstone deals like this one.
By the close of 2025, domestically manufactured chip equipment accounted for 35% of the total equipment used across China's semiconductor industry. This marks an increase from 25% in 2024 and surpasses the 30% target previously set by President Xi Jinping.
Advanced Micro-Fabrication Equipment has developed a 5-nanometer etching machine that is currently undergoing validation on TSMC's advanced production lines, as reported by SCMP.
Naura's oxidation and diffusion furnaces now represent over 60% of the 28-nanometer lines at SMIC, with its order backlog extending into the first quarter of 2027. Piotech has doubled its share of plasma-enhanced chemical vapor deposition tools at YMTC, bringing its market share to 30%.
Furthermore, China has mandated that all domestic chip projects must source at least 50% of their equipment locally. The country is projected to maintain its position as the world's largest market for semiconductor equipment through 2027, supported by significant capital expenditures.
President Jinping has provided governmental support through the state-backed China Integrated Circuit Industry Investment Fund, which has committed 2 billion yuan to core tool development. Additionally, industry subsidies are available, covering up to 15% of equipment purchases.