China’s AI chip market braces for turbulence as 14 million MetaX Integrated Circuits shares become tradable, following massive sell-offs triggered by Moore Threads’ recent lock-up expiry.
- 14 million MetaX shares unlock Thursday, triggering potential sell-off
- Moore Threads’ recent lock-up expiry wiped out nearly US$7.3 billion in value
- MetaX maintains strong profitability and ambitious production roadmap
What happened
On Thursday, the lock-up period restricting 14 million shares of MetaX Integrated Circuits will expire, allowing these shares to enter the public market. This event occurs hot on the heels of a significant sell-off triggered by the expiry of a comparable lock-up period for Moore Threads, another Chinese AI chip company. Moore Threads’ shares plummeted by about 20% immediately after unlocking 26 million shares, sparking a cascading sell-off that erased nearly 49 billion yuan (US$7.3 billion) from its market capitalization in a single day.
MetaX itself has already seen a decline in share value, dropping more than 22% in anticipation of its lock-up expiry. Early investors in MetaX still hold substantial unrealized gains, however, as the stock price remains significantly above its IPO price. Despite the looming selling pressure, both companies are preparing secondary listings in Hong Kong, and MetaX continues to advance its product development and market presence.
Why it matters
The release of MetaX’s locked shares represents a pivotal moment for China’s AI chip sector, which has been a focal point of investor enthusiasm amid the country’s ambition to compete with global industry leaders like Nvidia. The sector’s emergence, buoyed by the “four little dragons” including MetaX, Moore Threads, Biren Technology, and Enflame, highlights China’s strategic push to nurture indigenous chipmakers in key technologies such as artificial intelligence.
However, the dramatic sell-offs following lock-up expirations expose the volatility and speculative nature of this nascent market. These events underline the challenge of sustaining valuation momentum once early strategic investors and insiders begin cashing out. Still, analysts underline that the sell-offs largely reflect structural market dynamics rather than fundamental weaknesses, as companies like MetaX have shown improving profitability and ongoing ramp-ups in next-generation chip production.
What to watch next
Market participants will closely monitor the extent of selling pressure on MetaX shares following the lock-up expiry and whether this triggers additional declines in the broader AI chip sector on the Shanghai Star Market. The market’s response will provide critical signals about investor confidence in Chinese AI semiconductor firms’ ability to maintain growth and innovation amid increasing competition.
Meanwhile, developments in MetaX’s production capacity and profitability remain key indicators of its longer-term outlook. The company’s recent transition to profitability and the scheduled gradual ramp-up of its C600 processor production through 2026 and 2027 will be scrutinized as benchmarks of operational health. Investors will also observe how MetaX and Moore Threads manage their upcoming Hong Kong listings, which could further impact liquidity and share valuations.