On July 21, an announcement from GigaDevice added fuel to the already booming memory chip sector. This announcement regarding the DRAM fundraising project may seem routine, but it is actually a precise gathering of strength at a critical juncture. The core content of the announcement is clear: the company has decided to use 500 million RMB of its A-share raised funds to increase the capital of its wholly-owned subsidiary, Zhuhai Hengqin Xincun Semiconductor Co., Ltd. (referred to as "Zhuhai Xincun"), with the entire amount dedicated to the "DRAM Chip R&D and Industrialization Project." Of this, 50 million RMB will be allocated to registered capital, and 450 million RMB will go into the capital reserve. Following the capital increase, Zhuhai Xincun's registered capital will rise to 200 million RMB.
This is not a simple transfer of funds, but the implementation of strategic execution. As early as 2024, GigaDevice had already adjusted its fundraising projects, incorporating more cutting-edge products such as LPDDR5 into its planning. This capital increase can be seen as a clear signal of the accelerated R&D process following the adjustment. Looking at the financial data of Zhuhai Xincun, its revenue in the first quarter of 2026 has reached 1.106 billion RMB, with a net profit of 614 million RMB. This capital injection is akin to fueling an already galloping steed.
So, is the impact of injecting this money into the DRAM market positive or negative? My judgment is that it is a long-term positive for GigaDevice and a catalyst for accelerating the reshuffle of the existing landscape. Currently, the global DRAM market is undergoing drastic changes: international giants such as Samsung and SK hynix are accelerating their exit from the niche DDR3 and DDR4 markets to pursue the high profits of AI-driven HBM, creating a supply gap. This is precisely GigaDevice's window for capacity substitution. The capital increase for R&D aims to seize this window of opportunity and fill the gap with higher-performance and more cost-effective products. In the short term, this move increases future supply expectations, which may have a subtle balancing effect on the currently high price expectations for niche DRAMs; however, in the long term, it reinforces the logic of domestic substitution, helping to smooth out the severe price fluctuations caused by monopolies in the future, which is a potential benefit for downstream terminal manufacturers.
What exactly is Zhuhai Xincun, which is repeatedly mentioned in the announcement? It is not an external foundry or partner, but a 100% wholly-owned subsidiary established by GigaDevice in July 2024, serving as the core entity to carry the group's DRAM strategy. Previously, GigaDevice has injected funds into specific project implementation entities in Hefei, Xi'an, and other locations through it multiple times. According to the announcement, Zhuhai Xincun has strong profitability, with a full-year net profit of 220 million RMB in 2025, and its net profit in the first quarter of 2026 surged to 614 million RMB, indicating that its DRAM business is on the eve of explosive growth.
Interestingly, Zhuhai Xincun's DRAM products are not just on paper; they have already penetrated the smart hardware around us. Previously, when EEFOCUS disassembled the UBTECH Wukong AI robot at electronica Munich, a detailed analysis of its core circuit board revealed that the DRAM chip used to run algorithms and temporarily store critical data was supplied by Xincun, a subsidiary of GigaDevice. This confirms a fact: Zhuhai Xincun's DRAM has passed terminal product validation and has gained a firm foothold in low-power, high-reliability scenarios such as smart wearables and AIoT. As this capital injection accelerates the R&D of products with more advanced process nodes and larger capacities, we will see this Chinese chip in more AI terminals and smart vehicles in the future.
In summary, this move by GigaDevice is essentially a strategic reinforcement at the dual resonance point of the industry cycle and domestic substitution. This announcement confirms three certainties: a solid investment of 500 million RMB, Zhuhai Xincun as the core executor, and a main focus on niche and customized DRAM. As overseas giants voluntarily give up their positions, GigaDevice's long-gathered heavy punch aims not only at the immediate market share but also at seizing a more advantageous position in the next wave of memory technology.