[Digital Today reporter Jinju Hong (홍진주)] A large block of locked-up shares in Chinese AI chip company MetaX (METAX; 688802.SH) is set to be released, drawing attention to whether selling pressure will intensify in Chinese AI semiconductor stocks.

Hong Kong's South China Morning Post reported on Sept. 16 local time that about 14 million MetaX shares under lockup will be released to the market from Sept. 17.

Markets are on edge because of the earlier case of Moore Threads. Chinese AI chip company Moore Threads saw its stock plunge 20 percent immediately after about 26 million locked-up shares were released last week, pushing it to the Shanghai Star Market's daily down limit. The declines then continued, wiping out market value worth tens of billions of yuan.

Concerns are rising that MetaX could face similar selling. MetaX closed on Sept. 16 at about 478 yuan, putting the value of the shares set to hit the market at an estimated 6.7 billion yuan. The stock has fallen more than 22 percent in the past week alone.

MetaX and Moore Threads surged by several hundred percent after listing on the Shanghai Star Market in December last year, emerging as leading Chinese AI semiconductor names. Along with Biren Technology and Enflame, they were dubbed the industry's "four little dragons" and drew attention as standard-bearers in developing Chinese-made GPUs to take on Nvidia.

But the situation is changing as early investors' lockup periods end one after another. Kenny Ng, a strategist at Everbright Securities International, said MetaX could "face considerable selling pressure" due to the release of restricted shares. He cited that early investors bought at low prices and still hold substantial paper gains even after the recent pullback.

MetaX's IPO price was 104.66 yuan. Based on the Sept. 16 close, early investors' paper returns still exceed 350 percent. That suggests the lockup expiry could provide an opportunity to take profits.

Some analysis says the share release does not mean weakening results or a deterioration in business competitiveness at MetaX. Ng viewed the expected selling pressure as stemming from a market structural factor tied to the lockup expiry, rather than the company's operating soundness.

Results have improved instead. MetaX posted net profit of 612 million yuan in the first half of this year, swinging from a net loss of 186 million yuan a year earlier. It is the first among China's AI chip "four little dragons" to post a first-half profit.

Its product roadmap is also continuing. Goldman Sachs said in a recent report that MetaX began mass production of its next-generation C600 processor in May and is expected to gradually expand output from the second half of this year through 2027.

Moore Threads also showed improving results. Its net loss in the first half of this year was 11.6 million yuan, sharply down from 271 million yuan a year earlier.

Both companies are also seeking listings in Hong Kong. As a result, the MetaX lockup expiry is expected to serve as a test of where leading Chinese AI semiconductor stocks will settle after their early post-listing surges, beyond being a simple short-term supply-demand event.