China A-share memory-chip sector rose after volatile trading; Demingli hit the daily limit, Baiwei Storage climbed over 10%, Jiangbolong and Shannon C...

The China A-share memory-chip sector experienced a notable rebound following a period of volatility, with several key players posting strong gains. Demingli reached the daily trading limit, while Baiwei Storage climbed over 10%. Jiangbolong and Shannon Chip also advanced, reflecting renewed investor confidence in the sector. This rally follows a broader surge in global memory-chip stocks, driven by surging demand from AI applications and the resulting supply constraints.

The storage chip segment has been one of the most dynamic areas of the semiconductor industry in recent months. In the A-share market, companies such as Demingli and Baiwei Storage have seen significant price appreciation, with the storage chip sector rising approximately 30% since April 7. This performance mirrors trends in the U.S. and South Korean markets, where firms like Micron and SK Hynix have also posted record highs amid rising contract prices and increased demand for high-bandwidth memory (HBM).

The surge in memory-chip prices is largely attributed to the AI-driven shift in computing needs. AI servers require significantly more memory than traditional systems, with demand for HBM growing rapidly. This has led to a reallocation of production capacity by major manufacturers, favoring HBM over DRAM and other consumer-focused memory types. As a result, DRAM contract prices projected to rise by 58%-63% quarter-over-quarter in Q2, the steepest increase in a decade.

However, industry experts caution that the current boom may not be sustainable. Historical patterns suggest that periods of high prices are often followed by overinvestment and eventual oversupply, leading to price corrections. New fabrication facilities from leading memory producers are not expected to reach full production until late 2027 or 2028, meaning the current tight supply conditions are likely to persist for some time.

Meanwhile, the rise of China’s memory-chip sector has introduced new dynamics into the global market. Companies such as CXMT and YMTC are gaining traction as traditional leaders struggle to meet AI-driven demand. However, U.S. firms remain cautious about sourcing from China due to geopolitical concerns and regulatory restrictions. This tension highlights the growing complexity of global semiconductor supply chains as demand for memory chips continues to outpace supply.