GigaDevice earned more than 2 billion yuan from stock trading in the first half of the year.
Since the start of this year, a saying has been widely popular among A-share investors, "Stand in the light, store in the core", which refers to the two most profitable tracks in the first half of 2026: optical modules and memory chips.
GigaDevice (603986.SH) belongs to the latter category. As a leading enterprise in China's domestic memory chip design sector, its products cover NOR Flash (code-type flash memory chips used to store operating codes of storage devices), SLC NAND Flash (a data-type flash memory chip with long erasing and writing life and high reliability) and niche DRAM (dynamic random access memory, mainly used in scattered non-mobile phone and non-PC markets such as televisions, industrial control, and network communication), and it also produces MCUs (microcontrollers) and analog chips.
On August 18, GigaDevice released its 2026 semi-annual report data: in the first half of the year, it achieved operating revenue of 115.66 billion yuan, a year-on-year increase of 178.67%; the net profit attributable to shareholders of the parent company was 68.57 billion yuan, a year-on-year increase of 1091.50%. What does this profit level mean? For comparison, the total net profit attributable to shareholders of GigaDevice from 2021 to 2025 in five years is about 7.3 billion yuan.
However, all the profits GigaDevice earned in the first half of this year did not come from selling chips — several semiconductor industry chain stocks it held rose sharply in the first half of the year, contributing more than 2 billion yuan in book floating profit to the company.
GigaDevice has attracted much attention in the market recently. In addition to being in the booming memory chip track, this investment floating profit has also led to external controversies over a series of previous operations by Chairman Zhu Yiming: when GigaDevice's stock price was at a high level from May to June, Zhu Yiming reduced his holdings to cash out 4.4 billion yuan; after the stock price halved in July, he launched an increase plan of no less than 1 billion yuan, which was ridiculed by many investors as "doing T trading".
From the perspective of compliance, these operations are all within the regulatory framework, but in China's A-share semiconductor sector this year, chip companies at the peak of industry prosperity often face the situation that "high popularity brings many disputes", and both performance and controversies are often amplified by the market at the same time.
Prosperity Window of Niche Memory
GigaDevice's memory business achieved operating revenue of 98.28 billion yuan in the first half of the year, a year-on-year increase of 245.44%, accounting for 85% of the total operating revenue. The price of memory products rose continuously in the first half of the year, and the shipment volume increased simultaneously, becoming the main source of its profit increment.
GigaDevice focuses on niche memory (that is, segmented markets that large manufacturers do not engage in), which is fundamentally different from the mainstream memory market dominated by Samsung, SK Hynix and Micron. According to data from Omdia, the global DRAM market size in 2026 is about 522.6 billion US dollars, and niche DRAM usually accounts for about 10%, serving scattered downstream fields such as televisions, industrial control, network communication, and automotive electronics.
Hu Hong, Deputy General Manager of GigaDevice, said at the semi-annual performance exchange meeting held after market close on August 18 that customers in the mainstream market are very concentrated, and several large customers may occupy more than 90% of the transaction volume; the niche market is just the opposite, with thousands or even tens of thousands of customers spread across all walks of life. A single customer's procurement volume is not large, but combined, it forms a scattered and huge market.
Niche memory did not have high profits in the past. The core reason for the company's 245% year-on-year increase in memory revenue in the first half of the year is the change on the supply side. The surge in demand for high-end products such as HBM (high-bandwidth memory) and DDR5 (the fifth-generation double data rate memory, the current mainstream specification for data center and high-end PC procurement) from AI servers has prompted Samsung, SK Hynix, and Micron to accelerate their migration to new process nodes, actively reducing or even giving up the production of niche products.
GigaDevice also pointed out in its semi-annual report: "International leading companies are accelerating their migration to mainstream products such as HBM and DDR5 at new process nodes, giving up or reducing the production of niche products, and the shortage of supply has led to a sharp rise in the price of niche DRAM". In other words, large manufacturers have shifted to more profitable AI memory, leaving a gap in the supply of the niche market, and GigaDevice is exactly the beneficiary of this gap.
Data from the General Administration of Customs also shows that in the first six months of 2026, China's domestic integrated circuit export amount increased by about 96.1% year-on-year, of which the export amount in June alone reached 38.21 billion US dollars, a year-on-year increase of 122.2%. The sharp increase in amount is mainly driven by the price rise caused by the tight memory production capacity.
GigaDevice adopts the Fabless (fabless) mode, does not build its own production lines, and outsources wafer manufacturing and packaging testing to foundries. When asked whether it will build its own production lines at the performance exchange meeting, Hu Hong clearly responded: "This is our established strategy, and we will not change it."
The advantages of this model in the industry upward cycle are obvious: the company does not need to bear too much burden of production line depreciation, and the market dividend of simultaneous increase in volume and price can almost be directly converted into profits.
GigaDevice's net profit attributable to shareholders in the first quarter was 14.61 billion yuan, which jumped to 53.96 billion yuan in the second quarter, a quarter-on-quarter increase of 269%, and the overall gross profit margin in the second quarter exceeded 65%. However, Hu Hong also mentioned that considering that the cost on the supply side is also gradually rising, it is expected that the subsequent gross profit margin will gradually stabilize.
As of the end of the first half of this year, GigaDevice's monetary funds on its books are about 169.65 billion yuan, with no bank borrowings, and the asset-liability ratio is only 11.5%.
From the perspective of various product lines, Hu Hong introduced at the performance exchange meeting that Flash and DRAM are currently "running side by side" in terms of operating revenue, both being important revenue sources for the company. Niche DRAM has risen in price for several consecutive quarters. As of the end of the second quarter, the price is still in an upward trend, and it is expected to continue rising moderately in the second half of the year. Looking forward to 2027, the release of incremental production capacity is relatively limited, and product prices will also show a trend of high-level volatility.
The growth of SLC NAND is more rapid. The quarterly operating revenue in the first half of the year doubled quarter-on-quarter, which has become a new profit growth point. In this regard, Hu Hong believes that the prosperity cycle of SLC NAND "will last at least the whole year of 2027".
The management of GigaDevice previously mentioned at the investor exchange event on July 29 that the supply pattern of planar NAND (that is, 2D NAND, traditional planar process flash memory) has undergone fundamental changes, from being dominated by leading IDM (vertically integrated manufacturing) manufacturers to being dominated by Fabless and small-scale IDM manufacturers, "the era of low-cost supply with equipment depreciation completed is over".
NOR Flash is the most mature business line of GigaDevice. According to Omdia data, in 2025, GigaDevice's global share in the NOR Flash market was about 19.4%, ranking second in the world and first in mainland China.
The management of GigaDevice also stated at the investor exchange event on July 29 that the company "is expected to become the world's largest NOR Flash supplier in the next two to three years". The supply of MCU products is also relatively tight, and the price began to rise moderately in the second quarter. The management's outlook for the whole year is high double-digit revenue growth.
In addition, Qingyun Technology, a holding subsidiary of GigaDevice, is promoting customized memory business, and has made key customer breakthroughs in fields such as AI phones, AI PCs, and robots. Hu Hong said that this business "will achieve rapid growth in operating revenue" in 2027.
Wu Peidong, Managing Director of Wanjin Venture Capital, told the Economic Observer reporter that in the short and medium term, the industrial logic of the memory industry has not changed, what has changed is the pricing logic, "the market has switched from 'speculating on price increase elasticity' to 'verifying the sustainability of profitability'".
Halving, Share Reduction and ChangXin Memory Technologies
Among the about 69 billion yuan of profits GigaDevice earned in the first half of the year, more than 20 billion yuan came from "stock investment".
GigaDevice's semi-annual report shows that the fair value change income confirmed by the company (that is, the book floating profit or floating loss generated by the change in the market price of the financial assets it holds) is 22.28 billion yuan, compared with only about 7.35 million yuan in the same period of the previous year.
These incomes come from several strategic placements (that is, subscribing for shares in priority when listed companies make their initial public offerings as institutional investors) that GigaDevice participated in around the semiconductor industry chain, among which Lianxu Instruments (688808.SH) contributed 12.63 billion yuan, Zhenbao Technology (688797.SH) contributed 5.12 billion yuan, and Qiangyi Co., Ltd. (688809.SH) contributed 3.28 billion yuan.
Hu Hong said at the performance exchange meeting that these investments "are layouts made from the perspective of the industry", and the core starting point is to serve the main business, but he also admitted that this part of the income belongs to non-recurring profit and loss, "there is large fluctuation between different quarters".
In fact, the stock prices of the above-mentioned companies have fallen to varying degrees since July, and the floating profit confirmed in the first half of the year faces the possibility of being returned in the third quarter.
Since the beginning of this year, when it comes to GigaDevice, it is inseparable from ChangXin Memory Technologies (688825.SH).
Zhu Yiming serves as the chairman of both companies at the same time. All of GigaDevice's DRAM wafers are manufactured by ChangXin Memory Technologies, and GigaDevice also holds about 1.80% of the shares of ChangXin Memory Technologies. Before ChangXin Memory Technologies went public, many investors regarded GigaDevice as the "shadow stock" of ChangXin Memory Technologies.
The recent sharp rise and fall of GigaDevice's stock price and the controversy over Zhu Yiming's share reduction are all related to this relationship.
GigaDevice's stock price has shown an inverted V shape since the beginning of this year. It was about 210 yuan per share at the beginning of the year, and then rose all the way along with the upward prosperity of the memory industry. On June 29, it touched a stage high of 846.66 yuan during intraday trading. As of the close on August 18, GigaDevice's stock price was 436.74 yuan.
According to the share reduction result announcement disclosed on July 30, Zhu Yiming reduced his holdings of 1111.06 million shares of GigaDevice through centralized bidding and block trading from May 6 to June 12, with a price range of 339.44 yuan to 538.90 yuan, with a total amount of about 4.4 billion yuan. After the reduction, his shareholding ratio dropped from 6.53% to 4.94%.
This share reduction happened to fall in the upward range of the stock price. Less than three weeks after Zhu Yiming completed the share reduction, GigaDevice's stock price touched its historical high.
On July 27, ChangXin Memory Technologies landed on the Sci-Tech Innovation Board. On the first day of listing, its stock price rose by 465.82%, with a single-day transaction volume as high as 1411 billion yuan.
After ChangXin Memory Technologies was listed independently, the "shadow stock" logic no longer holds. GigaDevice hit the limit down for three consecutive trading days. From the high point on June 29 to the end of July, GigaDevice's stock price fell by 57%, and its market value evaporated by more than 3200 billion yuan.
On the evening of July 29, when the stock price halved, GigaDevice disclosed three announcements on the same day: Zhu Yiming proposed that the company repurchase A-share shares for cancellation with an amount of 10 billion to 20 billion yuan, and he personally plans to increase his holdings by no less than 10 billion yuan, promising not to reduce his holdings in the next 12 months. The start date of the increase plan is December 13, which is exactly 6 months away from the completion date of the last share reduction on June 12.
According to relevant regulatory provisions, shareholders of listed companies holding more than 5% of shares shall not conduct reverse buying within 6 months after selling stocks, and December 13 just meets this requirement.
However, some shareholders are increasing their holdings. As of the end of the first half of this year, among the top ten shareholders of GigaDevice, the well-known investor Ge Weidong holds 1644.67 million shares (accounting for 2.34%), and his consistent actor Wang Ping holds 860 million shares (accounting for 1.23%). Compared with the end of the first quarter, Ge Weidong increased his holdings by 185,100 shares in the second quarter, and Wang Ping increased his holdings by 1.03 million shares.
In fact, with the listing of ChangXin Memory Technologies, the relationship between GigaDevice and ChangXin Memory Technologies has not weakened; at the business level, GigaDevice's procurement amount from ChangXin Memory Technologies in the first half of this year is close to 20 billion yuan, and the management expects the full-year amount to be 58 billion yuan. The rise in procurement amount is mainly driven by price increases; at the equity level, GigaDevice holds about 1.80% of the shares of ChangXin Memory Technologies with an investment cost of 23 billion yuan. GigaDevice's semi-annual report shows that the ending fair value of this investment is about 100.62 billion yuan, accounting for 23.7% of GigaDevice's total assets. However, since it is included in the other equity instrument investment account, the fair value change goes through other comprehensive income and does not affect the current net profit.
Hu Hong said at the performance exchange meeting that with the promotion of DDR4 (the fourth-generation double data rate memory, the mainstream product in the current niche market) in the niche market and the mass production of new LPDDR4X (low-power version of the fourth-generation memory, mainly for mobile and Internet of Things devices) products, the procurement amount of GigaDevice from ChangXin Memory Technologies will rise quarter by quarter in the next few years, and the overall production capacity "will show a continuous upward trend".
When talking about the relationship between GigaDevice and ChangXin Memory Technologies, Hu Hong said that the two sides "are not a simple supply and demand relationship, but a partnership". The two sides will align the product development roadmap and production capacity supply, and "plan the future (growth) momentum in the form of scenarios".
Hu Hong also emphasized that GigaDevice is a company that pursues long-termism, and its business strategy has not changed since 2023, "which is to pursue the improvement of market share".
This article is from the WeChat official account "Economic Observer", author: Zheng Chenye, released with authorization from 36Kr.