(Yicai) July 10 -- Alibaba Group Holding could reap a 17-fold return on its CNY7.6 billion (USD1.1 billion) investment in chipmaker ChangXin Memory Technologies, which is preparing to launch what could become the mainland market’s largest initial public offering of the year later this month, according to public information and multiple sources interviewed by Yicai.

CXMT expects its share issuance on Shanghai’s Nasdaq-style Star Market to take place on July 16, the Hefei-based company said yesterday. The firm aims to raise ‌CNY29.5 billion (USD4.3 billion)‌, which would make it the largest IPO on the mainland market this year so far.

Alibaba, which was an early investor in CXMT, could see the value of its stake reach around CNY130 billion (USD19.2 billion) after the IPO. Alibaba first invested in the chipmaker in December 2021. After several rounds of financing, its stake was diluted to about 1 percent. Three and a half years later in June 2025, Alibaba made a substantial additional investment, raising its stake to around 5 percent. Alibaba’s total investment in CXMT has climbed to CNY7.6 billion, making it the largest industry investor in terms of shareholding.

Alibaba's investment strategy over the past three years has undergone a major shift, with the company focusing on artificial intelligence and actively investing in chips, large language models, embodied intelligence and AI applications. So far, the strategy appears to have generated substantial returns. According to incomplete statistics, Alibaba has invested about CNY36 billion (USD5.3 billion) in external AI-related projects over the past three years, with current unrealized gains exceeding CNY210 billion.

Alibaba has made two significant investments in the semiconductor industrial chain, targeting DRAM memory chip maker CXMT and Montage Technology, a firm specializing in server connectivity solutions.

Montage's products cover critical server infrastructure components, including memory interface chips, PCIe/CXL retimers and high-speed AI interconnect technologies. The company went public on the Hong Kong Stock Exchange in February, with Alibaba subscribing to approximately CNY500 million (USD73.7 million) worth of shares, making it the third-largest cornerstone investor.

The investment has further strengthened synergies across Alibaba's AI computing power infrastructure ecosystem, and paper gains have more than tripled based on secondary market stock prices.

In addition, Alibaba has invested in several other semiconductor companies, including ASR Microelectronics, Lightelligence and Vastai Technologies, as well as SiliconFlow, an AI infrastructure company. ASR Microelectronics is already listed on the mainland, Lightelligence is listed in Hong Kong, Vastai has submitted its guidance application to go public on the mainland and SiliconFlow has filed for an IPO on the Hong Kong bourse.

Editor: Kim Taylor