Suspicion of Fraud Amid Stock Market Delisting... The Wingless Fall of the 'Nebiidia of the Continent'

'NVIDIA Challenger' Zhong Zhuang Technology
Boasted Performance-Matched DPU Development
But Sales Revealed to Be Poor

Once hailed as the "challenger to Nvidia" and regarded as the hope for China's artificial intelligence (AI) semiconductor industry, Zuojiang Technology (左江科技·Beijing Zuojiang Technology) has faced the humiliation of being delisted from the stock market. The company is reported to have recently undergone a rigorous investigation by authorities over allegations of financial fraud.

Hong Kong media outlet South China Morning Post (SCMP) reported on the 1st (local time) that Zuojiang Technology is scheduled to halt trading on the Shenzhen Stock Exchange starting July 26. Previously, the company failed to submit a transparent audit report for its annual performance, ultimately leading to its expulsion from the Shenzhen stock market.

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The China Securities Regulatory Commission (CSRC) strongly criticized Zuojiang Technology earlier this year. The company’s financial statements submitted last year were deemed "seriously false" and there was a possibility that "financial fraud was committed." Following the announcement by the authorities, Zuojiang Technology’s stock price plummeted. Once reaching 300 yuan ($41.26) per share, the price fell to 6.94 yuan in April and trading was subsequently suspended.

Zuojiang Technology is believed to have been facing a crisis since 2022. At that time, the Shenzhen Stock Exchange requested the company to explain the reasons behind a sharp decline in sales and an increase in operating losses.

Later, Zuojiang Technology released an annual report claiming to have reduced net losses by 2,670% within a year, but the Shenzhen Exchange placed a "Special Treatment" (ST) warning on the company’s stock. Stocks marked with ST indicate financial risks and advise investors to exercise caution. Following this, the company was labeled with "financial fraud" by Chinese financial authorities, effectively cornering it into a dead end.

Meanwhile, Zuojiang Technology was once a company that garnered high expectations as the "Chinese Nvidia." The company specialized in developing data processing units (DPUs), a type of logic semiconductor. DPUs optimize data flow between the central processing unit (CPU), graphics processing unit (GPU), and memory devices, which are essential for AI operation, thereby improving server efficiency.

Zuojiang Technology emphasized that its self-developed NE6000 DPU was on par with Nvidia’s DPU product, BlueField-2, in terms of performance. However, investigations revealed that actual sales were very poor. Only 400 units of the NE6000 were sold last year, and even those customers reportedly barely used the product.