Chinese AI Chipmaker Enflame Mints Two Billionaires As Stock Surges 180% In Shanghai Debut

Investor enthusiasm for semiconductor stocks in China has continued to create billion-dollar fortunes, with the two cofounders of chipmaker Shanghai Enflame Technology joining the world’s three-comma club on Friday as the company’s shares rallied as much as 234% in its trading debut.

The stock later pared some of its gains to end almost 180% higher as of market close. The two newly minted billionaires are Enflame’s 60-year-old Chairman Zhao Lidong and 48-year-old CEO Zhang Yalin. Each has amassed a fortune of $2.1 billion based on their respective stakes in the semiconductor company, according to Forbes estimates. Enflame didn’t respond to a request for comment.

Enflame raised 6.1 billion yuan ($912 million) earlier this week by selling about 43 million shares at 142.18 yuan apiece, according to a stock exchange filing. The company intends to use the proceeds to develop its next generation of semiconductors and related software, its prospectus shows.

The company was cofounded in 2018 by Zhao, a U.S. citizen, according to its prospectus. A veteran in the semiconductor industry with over 30 years of experience, the mogul once held senior roles at American chip giant Advanced Micro Devices (AMD) and Chinese tech firm Tsinghua Unigroup. His tenure at AMD overlapped with that of Zhang, a Chinese national. Zhang, also an experienced semiconductor designer, oversaw the development of customized chips for Microsoft’s Xbox One gaming device while working at AMD in China, its prospectus shows. Zhang holds more than 50 patents, according to Enflame’s website.

But it remains to be seen whether today’s rally can be sustained. The surge is largely driven by enthusiasm for new shares, especially those issued by semiconductor companies, says Shen Meng, Beijing-based managing director of boutique investment bank Chanson & Co. Investors favor them as China remains focused on building its own technology supply chain to fend off U.S. export restrictions. They bet these types of stocks will always pop on listing day, he says.

As for fundamentals, Enflame is deeply in the red. Like peers such as Biren Technology, MetaX Integrated Circuits and Moore Threads — all of which saw their shares fall from post-debut peaks — Enflame is investing heavily in research and development. Collectively, the companies are known as China’s four “little dragons” that are intent on developing local alternatives to Nvidia semiconductors.

Enflame counts Chinese tech giant Tencent as its largest customer. Last year, sales to the gaming and social media giant accounted for over 80% of revenue, which grew almost 40% year-on-year to 990.2 million yuan. Net loss was 1.2 billion yuan, shrinking slightly from 1.5 billion yuan in 2024, its prospectus shows. Tencent is also the company’s largest shareholder, amassing an almost 20% stake since first investing at the company’s founding in 2018, according to Chinese corporate information system Qichacha. A business agreement followed in 2019, with Enflame developing and customizing AI chips for Tencent over the years, its prospectus shows.