(Yicai) April 28 -- Shares of Xizhi Technology, also known as Lightelligence, surged on their first day of trading in Hong Kong, with the Chinese company becoming the world's first artificial intelligence optical computing solutions developer to go public.

Xizhi Tech [HKG: 1879] closed 384 percent higher at HKD886 (USD113.07) a share today, after surging by as much as 444 percent at one point. Its market capitalization topped HKD81.5 billion (USD10.4 billion).

Xizhi Tech issued about 13.8 million shares at HKD183.2 (USD23.38) apiece, raising about HKD2.3 billion (USD293.5 million) after deducting issuance costs. Seventy percent of the proceeds will be used for research and development over the next five years, including optical interconnect hardware and solutions, as well as optical computing products, with the rest going for commercialization and general purposes, according to the Shanghai-based firm's prospectus.

Established in 2018, Xizhi Tech has adopted an optical computing technology approach that differs from mainstream chip makers. Optical computing leverages photons instead of electrons for information transmission and processing, offering high throughput, low latency, low energy consumption, and other advantages.

As the demand for AI computing power continues to grow, optical computing chips are expected to capture 30 percent to 50 percent of the market related to data centers within the next five years, potentially creating a market worth over USD1 trillion, Shen Yichen, founder and chief executive officer of Xizhi Tech, told Yicai.

Xizhi Tech is the world's first company to achieve large-scale deployment of optical-electrical hybrid computing power, ranking first worldwide in optical computing chip shipments for two straight years, according to market research firm Frost & Sullivan. It held up to 88 percent of China's independent scale-up optical interconnect solutions market last year.

Against the backdrop of restrictions on importing high-performance chips, China is embracing optical interconnect and optical computing technologies at a pace that far exceeds overseas markets, making it highly likely to become the first country in the world to implement large-scale optical computing, Shen noted.

Xizhi Tech will leverage the dense concentration of chip companies, foundries, and AI model and application developers in Shanghai and surrounding areas to co-build the future optical computing ecosystem, Shen pointed out.

Shanghai is accelerating its efforts to create a global powerhouse for computing power. Several local chip companies have completed initial public offerings, including MetaX Integrated Circuits, which listed on the Shanghai Stock Exchange's Star Market technology board at the end of last year, as well as Biren Technology and Iluvatar CoreX Semiconductor, which went public in Hong Kong earlier this year.

Shanghai's integrated circuit industry rose 16 percent to CNY580 billion (USD84.9 billion) last year from the previous year, according to data released by the Shanghai Municipal Commission of Economy and Informatization. The city homes over 1,200 integrated circuit companies, including 35 listed on the Star Market.

Xizhi Tech's net loss widened 83 percent to CNY1.3 billion (USD190.5 million) last year from 2024, mainly due to high R&D expenses and stock option grants to employees, according to the prospectus. Revenue rose 77 percent to CNY106.4 million (USD15.6 million).

Editors: Dou Shicong, Martin Kadiev