The delay, which could last several months, is expected to affect the company's fundraising plans and potentially slow its efforts to expand production capacity in China's semiconductor industry.
CCSH Corporation, the parent company of YMTC, filed for the IPO in August on Shanghai's STAR Market, a Nasdaq-style exchange designed to accommodate technology and innovation-driven businesses. The proposed offering was expected to raise 33 billion yuan, equivalent to approximately $4.9 billion.
The company had planned to begin the strategic share placement process between late October and early November. However, an internal memo sent to employees indicated that the exercise had been suspended.
According to Reuters, which cited the internal communication and people familiar with the matter, the company attributed the postponement to "various factors" without providing further details.
Two sources familiar with the company's plans said the delay could extend for several months, adding that YMTC might now pursue its public listing in the first half of 2027, depending on market conditions.
The proposed IPO is considered significant to China's semiconductor ambitions, as Beijing continues to pursue technological self-reliance and reduce dependence on foreign chip suppliers.
IPO delay threatens expansion plans
YMTC, China's largest manufacturer of NAND flash memory chips, has emerged as an increasingly important player in the global semiconductor industry.
NAND chips are widely used for data storage in smartphones, computers and data centres, making them essential components of modern digital infrastructure.
The company's rapid expansion following the global memory chip shortage has enabled it to increase its presence in the Chinese market, gaining ground against established South Korean competitors, including Samsung Electronics and SK Hynix.
However, the suspension of its proposed share sale could complicate plans to raise the capital required for further production expansion.
The IPO was expected to provide substantial funding to support the company's growth as competition intensifies in the global memory chip market.
YMTC's application remains at the inquiry stage, according to information published on the Shanghai Stock Exchange's website.
The company did not respond to Reuters' request for comment, while the sources familiar with the postponement declined to be identified because the discussions were confidential.
Weak stock market prompts tighter IPO scrutiny
The postponement comes amid a difficult period for China's equity market, with technology stocks experiencing significant declines in recent months.
The blue-chip CSI300 Index fell 8.5 per cent in October, recording its worst monthly performance in more than a decade.
Similarly, the STAR50 Index, which tracks major technology and artificial intelligence companies listed in Shanghai, declined by 40 per cent from its July peak to the end of October.
The weakening market has reportedly prompted regulators to exercise greater caution over new listings and large share offerings.
Three people familiar with the matter told Reuters that regulatory scrutiny of proposed IPOs in China had intensified over recent weeks as market conditions deteriorated.
The China Securities Regulatory Commission (CSRC) has also reportedly issued informal guidance to investment banks to slow down IPO processes involving artificial intelligence and semiconductor companies, according to four other sources familiar with the discussions.
The regulator did not respond to Reuters' request for comment.
Separately, the Financial Times reported on Tuesday that China's securities regulator had instructed investment banks to pause IPOs and suspended large share sales by existing shareholders until market conditions improve.
The developments highlight the growing pressure on China's technology companies seeking to raise capital through public markets, particularly as authorities attempt to balance the country's technological ambitions with concerns over market stability.
For YMTC, the postponement represents a setback to its immediate fundraising timetable, although its potential listing in 2027 could provide another opportunity if market conditions improve.