Memory
Memory price hikes are a consensus across the board, but for each individual company, the dividends reaped, the paths taken, and the risks hidden vary significantly.
Net profits surging 715-fold, 11-fold, 19-fold, and a turnaround from loss to profit—four semi-annual reports are laid out on the table, and the business logic behind the numbers tells a unique story for each.
Since August, Longsys, Netac Technology, GigaDevice, and Puya Microelectronics have successively disclosed their 2026 semi-annual reports. The scale of these four companies spans dramatically from less than 1 billion to 24 billion RMB, and their business models cover multiple dimensions including modules, IC (Integrated Circuit) design, and consumer retail, perfectly forming a stratified sample for observing this round of the memory cycle.
01. The Backdrop of Price Hikes
Looking at prices first, memory chip prices have experienced a rare and rapid upward trend. Data from TrendForce shows that in the first quarter of 2026, contract prices for conventional DRAM increased by 93% to 98% quarter-on-quarter, and NAND Flash contract prices rose by 55% to 60% quarter-on-quarter; entering the second quarter, due to the structural tightening of supply for mature-node DRAM, the estimated increase in DDR2 contract prices for the second quarter will reach approximately 55-60%, and the third quarter is estimated to see a further increase of 35-40%.
The differences in price increases among specific subcategories are even more pronounced. NOR Flash and SLC NAND face particularly prominent supply gaps because international major manufacturers continue to shrink their mature-node capacity. A report released by TrendForce in June pointed out that in the first half of the year, the cumulative increase in contract prices for both types of products exceeded 100%, and there are no plans for large-scale capacity expansion in the second half of the year, making it difficult to quickly alleviate the tight supply and demand situation. In addition, TrendForce also estimates that it will push up the SLC contract price in the second half of 2026 by 120-170% compared to the first half, and there is room for upward revision.
These figures explain why the gross profit margins of the four companies have collectively jumped. Longsys's gross profit margin for memory products leaped from around 13% in the same period last year to 59.08%, GigaDevice's overall gross profit margin reached 63.13%, of which the memory chip business gross profit margin was 67.57%. Even Netac Technology, the smallest in scale, saw its overall gross profit margin recover from 7.11% to 19.99%.
The profit leverage effect in the memory industry is vividly demonstrated in this cycle: wafer foundry and packaging and testing costs are relatively fixed, and after contract prices double, most of the extra selling price directly settles into profit.
But while all four companies reap the dividends of price hikes, their approaches are not the same.
GigaDevice, Niche Market Dividends for a Design Leader
GigaDevice's semi-annual report released on the evening of August 18 is a representative sample of IC design companies in this round of the memory cycle. In the first half of the year, revenue reached 11.566 billion RMB, a year-on-year increase of 178.67%; net profit attributable to shareholders of the parent company was 6.857 billion RMB, a year-on-year increase of 1091.50%; and net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was 4.883 billion RMB, a year-on-year increase of 796.90%.
The gap of nearly 2 billion RMB between net profit attributable to parent and net profit after deducting non-recurring items mainly comes from gains on changes in fair value—floating profits generated by equity investments held by the company in companies such as CXMT (ChangXin Memory Technologies). Excluding this part, the profitability of the main business is equally strong: revenue from the memory chip business reached 9.827 billion RMB, a year-on-year increase of 245.44%, and the gross profit margin reached 67.57%, a year-on-year increase of more than 30 percentage points.
Specifically in terms of product lines, niche DRAM and SLC NAND are the two fastest-growing categories, and the core logic for both is the supply gap left by the voluntary withdrawal of international major manufacturers. Overseas manufacturers continue to shift their capacity towards high value-added products such as HBM and high-end 3D NAND, gradually fading out of the niche DRAM and 2D NAND markets. Relying on years of accumulation, GigaDevice quickly filled the gap, achieving growth in both volume and price.
NOR Flash, as a traditional advantageous category, remains steady, with shipments continuing to grow in fields such as industrial, automotive, and communications. The MCU (Microcontroller Unit) business provides a second growth curve, with revenue of 1.430 billion RMB in the first half of the year, a year-on-year increase of 49.07%, and a steady increase in penetration rate in fields such as industrial control and automotive electronics. This diversified layout of "memory + MCU" gives GigaDevice greater elasticity during the upswing of the cycle and more buffer space during the downswing.
In terms of operating quality, the net cash flow from operating activities in the first half of the year was 6.048 billion RMB, a year-on-year increase of 531.47%. The cash flow basically matches the profit, demonstrating the stronger bargaining power and collection ability of IC design companies in the price hike cycle.
Puya Microelectronics, High Growth Driven by M&A Consolidation
Puya Microelectronics, which also disclosed its semi-annual report on August 18, delivered the highest revenue growth rate among the four companies—revenue of 3.959 billion RMB, a year-on-year increase of 336.67%; net profit attributable to shareholders of the parent company was 827 million RMB, a year-on-year increase of 1929.65%.
But this high growth rate needs to be broken down. In November 2025, Puya Microelectronics acquired a 51% equity stake in Zhuhai Noah Changtian Memory Technology, bringing its wholly-owned subsidiary SkyHigh Memory Limited (SHM) into the consolidation scope.The semi-annual report shows that SHM contributed approximately 2.346 billion RMB in operating revenue in the current period, accounting for 59.26% of total revenue. After excluding the M&A factor, the company's original business revenue was approximately 1.613 billion RMB, a year-on-year increase of 77.90%.
SHM focuses on mid-to-high-end 2D NAND and derivative memory products, with selling prices and gross profit margin levels higher than Puya's original product lines. The M&A not only directly expanded the revenue scale but also optimized the overall product structure. The company's management attributes the growth to three points: rising memory chip prices, the volume increase of new products such as MCU and Driver under the "memory +" strategy, and the consolidation contribution of SHM.
From the perspective of business layout, Puya Microelectronics is transforming from a single NOR Flash manufacturer into a multi-category memory platform. The acquisition of SHM complements the NAND Flash product line, while new businesses such as MCU and analog chips extend into fields like industrial control and AIoT (Artificial Intelligence of Things). This path of rapidly scaling up through M&A can amplify performance elasticity during the industry upswing, but the post-M&A integration effects and the sustainability of endogenous growth still need to be verified in subsequent reporting periods.
Netac Technology, Mild Recovery in the Consumer Track
Among the four companies, Netac Technology has the smallest scale and a relatively moderate growth rate. In the first half of the year, operating revenue reached 966 million RMB, a year-on-year increase of 101.76%; net profit attributable to shareholders of the parent company was 95.0797 million RMB, compared to a loss of 17.8578 million RMB in the same period last year, achieving a turnaround from loss to profit.
Netac Technology's business focus has long been in the consumer memory market, with products covering categories such as SSD (Solid State Drive), DRAM memory modules, and portable storage. Structurally, flash memory application products achieved revenue of 676 million RMB, a year-on-year increase of 93.91%, with a gross profit margin of 22.72%, a year-on-year increase of 10.47 percentage points; revenue from flash memory controller chips and other products was 280 million RMB, a year-on-year increase of 140.79%.
The gross profit margin level of around 22% is significantly lower than Longsys's 58.9% and GigaDevice's 63.1%, reflecting the characteristics of the consumer memory track where competition is more sufficient and price transmission ability is weaker. Downstream customers are mainly retail channels and consumer electronics manufacturers, which are more sensitive to prices, making it difficult to fully pass on the cost of upstream wafer price hikes.
Netac Technology's operating cash flow turned from negative to positive, with a net amount of 109.6 million RMB in the first half of the year, showing a significant year-on-year improvement. However, financial expenses increased by 217% year-on-year, and the scale of inventory also rose, indicating that while the company increased its stocking efforts during the upswing of the cycle, its financial leverage also increased accordingly.
The company is attempting to find new directions. Its wholly-owned subsidiary, Langkun Technology, has built a server production line with an annual capacity of 50,000 standard servers, cutting into the computing power server field. However, this part of the business has not yet formed a significant revenue contribution in the semi-annual report.
Longsys, Fiercest Profit Growth, Tightest Cash Flow
Longsys's semi-annual report, disclosed first on August 10, features impressive figures: in the first half of the year, operating revenue reached 24.088 billion RMB, a year-on-year increase of 136.26%; net profit attributable to shareholders of the parent company was 10.577 billion RMB, a year-on-year increase of 71528.66%. This growth rate is also unmatched in the A-share semiconductor sector.
Looking at a single quarter, Q2 revenue was 14.18 billion RMB, and net profit attributable to shareholders of the parent company was 6.715 billion RMB, increasing by 43.1% and 73.85% quarter-on-quarter, respectively. The profit release speed is faster than revenue growth, and the core driving force comes from the substantial leap in gross profit margin—the comprehensive gross profit margin in the first half of the year was 58.90%, a year-on-year increase of 45.95 percentage points, rising for five consecutive quarters.
Breaking down the business structure, the growth comes from three parallel lines of effort. Enterprise storage is the most elastic segment, with revenue of 2.140 billion RMB in the first half of the year, a year-on-year increase of 208.80%, a figure that has already surpassed the full-year 1.783 billion RMB in 2025. The demand for highly reliable storage from AI (Artificial Intelligence) servers is the main driver. The company's PCIe 5.0 enterprise SSDs, RDIMMs, and other products have entered the supply chains of leading domestic Internet companies and server manufacturers.
The globalized channels on the consumer end constitute the core foundation. Global sales revenue of its Lexar brand reached 3.966 billion RMB, a year-on-year increase of 84.90%; the Brazilian subsidiary Zilia achieved revenue of 3.950 billion RMB, a year-on-year increase of 184.58%. The two major overseas businesses combined contributed nearly 8 billion RMB in revenue, accounting for one-third of total revenue. The continuous shipment of self-developed controller chips provides support on the cost side. As of the end of the reporting period, the cumulative production volume of self-developed controller chips exceeded 280 million units, and 5nm process UFS 4.1 controllers have achieved large-scale shipment.
However, high growth is accompanied by cash flow pressure. The net cash flow from operating activities in the first half of the year was -3.151 billion RMB, turning from positive to negative year-on-year, mainly due to a substantial increase in expenditures for upstream wafer procurement and stocking. This is a typical feature of the upswing phase of the cycle—manufacturers tend to lock in materials and stockpile, but it also means that once the price trend reverses, the risk of inventory impairment will be amplified simultaneously.
02. Beyond the Cycle
In a report released in early July, TrendForce estimated that in the third quarter of 2026, contract prices for conventional DRAM will increase by 13% to 18% quarter-on-quarter, and NAND Flash will increase by 10% to 15%, indicating that the price increases have significantly converged compared to previous quarters.
At the end of July, TrendForce further predicted that the tight supply pattern of DRAM is expected to continue until 2027, while the supply of NAND Flash will tend to loosen in the second half of 2027, and prices may face correction pressure.
The semi-annual report is a report card and also a mirror. The price hike cycle has pushed up the profits of all companies, but after the tide goes out, it is still not entirely clear who is swimming naked. But at least these four financial reports provide a compelling observation window.
#MemoryChips #Semiconductors #GigaDevice #PuyaMicroelectronics