Shares in Chinese chipmaker Enflame surged 206% after the company’s stock market debut in Shanghai. The company is developing domestic alternatives to U.S. rivals including Nvidia, and strong investor appetite has turned the listing into one of the most closely watched AI chip offerings in China.
Retail demand was exceptionally strong. Orders in the initial retail tranche exceeded the number of shares available by more than 6,000 times, prompting the company to reallocate additional stock to that investor group.
Backed by Tencent, Enflame is regarded as one of China’s so-called “four little dragons” of AI chipmaking and was the last of that group to go public. The other three also posted sharp first-day gains and have stayed above their listing levels since. In December, MetaX soared nearly 700% on its first trading day, Moore Threads rose more than 400% on debut, and Biren gained 76% in its January IPO.
Investors are betting that domestic AI chipmakers can replace Nvidia in China. According to IDC data cited in Enflame’s prospectus, international chipmakers led by Nvidia accounted for nearly 60% of China’s AI accelerator market in 2025. But U.S. export controls and Beijing’s lukewarm interest in importing advanced chips are reinforcing China’s push for technological self-sufficiency.
China’s semiconductor expansion is gathering pace. In an August report, Goldman Sachs said the rise of foundation models and AI applications in China was driving development across AI chips, foundries, memory and advanced packaging. The bank’s analysts expect China’s semiconductor capital spending to reach $82 billion by 2030, supported by capacity expansion in memory and advanced nodes amid the growing generative AI trend.
Local companies are also narrowing the gap. CNBC reported that Moonshot AI’s Kimi K3 has moved closer to leading U.S. models, while Chinese AI systems are gaining wider adoption globally. Rival Z.ai said its GLM-5.3-Flash model runs entirely on China-made chips. Analysts said the system likely uses a mix of chips from Huawei, Enflame and other domestic suppliers. Alibaba is also developing its own AI chips and related software while optimizing systems for leading Chinese models.
Revenue rises
Founded in 2018, Enflame is building AI processors as China steps up model development amid rapid progress by domestic developers. The company said it will use listing proceeds to develop and commercialize its fifth- and sixth-generation AI chips, aiming to match the performance of high-end products from international rivals.
Enflame reported 2025 revenue of 990 million yuan, or $147 million, up from 722 million yuan a year earlier. The company has not yet turned a profit.
Technology hardware stocks have become a major driver of Chinese equity performance in recent months. In July, shares of DRAM chipmaker CXMT jumped nearly 466% in their debut on Shanghai’s tech-focused STAR Market, making CXMT the most valuable China-listed company.
