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Shares in Shanghai Enflame Technology, one of China’s leading artificial intelligence chipmakers and a domestic rival to Nvidia, rose more than 200% on Friday in their first trading session on Shanghai’s STAR Market, a platform for technology companies.
The shares, priced at about $20 in the initial public offering, opened at approximately $58, representing an 188% increase from the issue price. They climbed to around $67 during the session, marking a gain of 234%.
Demand for the portion of the IPO reserved for retail investors exceeded the available supply by 4,073 times. About 7 million online investors placed orders for 42.1 billion shares. The allocation ratio for individual investors was just 0.025%.
Enflame raised 6.12 billion yuan, or about $913 million, through the IPO. The Tencent-backed company develops chips for training artificial intelligence models and processing their outputs.
The company is considered one of the “four small dragons” in China’s AI chip sector. The other members of the group — MetaX, Moore Threads and Biren — also recorded sharp gains in their market debuts. MetaX rose about 700% in December, Moore Threads gained more than 400% that month, and Biren climbed 76% in January.
Investor interest is linked to expectations that Chinese chipmakers can gain market share in the AI accelerator market, currently dominated by foreign companies, particularly Nvidia.
According to data from IDC cited in Enflame’s prospectus, international chipmakers led by Nvidia controlled about 60% of China’s AI accelerator market in 2025. Beijing’s policy of increasing self-reliance in semiconductors, together with US export restrictions, is creating opportunities for domestic companies to expand.
Enflame has yet to become profitable and remains heavily reliant on Tencent. Although its revenue rose 37% last year, that increase would not normally explain a gain of more than 200% on the first trading day based on the company’s financial fundamentals.
The company plans to use the IPO proceeds to develop and commercialize fifth- and sixth-generation AI chips. Its aim is to compete in the future with high-end products from international rivals such as Nvidia.
Enflame’s listing recalls the surge seen during the STAR Market debut of memory chipmaker CXMT in July. At the time, CXMT shares rose about 466% and briefly became the most valuable listed company in China.
Analysts say the strong demand seen during the listings of subsidized, loss-making chip startups reflects China’s strategy of reducing its dependence on US technology more than expectations of short-term returns.
