In-depth Analysis of the Sustainability of the Memory Chip Industry Cycle Reversal and Dongxin Semiconductor's Competitive Advantages

Based on the latest market data and industry information, I will provide professional analysis from two dimensions: the sustainability assessment of the industry cycle and the core competitive advantages of Dongxin Semiconductor.

The memory chip industry is in one of the strongest upward cycles in history. According to industry information from online searches, since October 2025, driven by AI demand, giants such as Samsung, SK Hynix, and Micron have continuously raised product prices, kicking off the industry’s ‘super cycle’ [6]. Key characteristics of this cycle include:

• DDR memory prices have risen for 6 consecutive months, with a Q3 YoY increase of 171.8%
• Q4 DRAM contract prices increased by over 75% YoY
• NAND flash contract prices rose by 50%
• Surveillance hard disk prices increased by over 30% cumulatively, and some consumer SSD prices doubled [6]

①

- Server-side DRAM demand will surge by 21% YoY in 2026 compared to 2025, and AI servers’ demand for memory capacity shows exponential growth [4][6]. Demand for high-bandwidth memory (HBM) in AI training and inference scenarios continues to climb.

②

- The storage capacity of consumer electronics such as smartphones and PCs continues to increase, with storage specifications of each generation of products rising upward.

③

- Applications like autonomous driving, IoT, and Industry 4.0 have increased demand for high-reliability memory chips.

①

- The three major memory giants Samsung, SK Hynix, and Micron are shifting production capacity from traditional memory chip fields such as DDR4 to high-end DRAM products dedicated to AI servers. Data shows that in 2025, the monthly production capacity of the three giants in traditional memory fields was halved compared to before, and related production capacity is expected to be basically cleared by 2026 [6].

②

- Infrastructure construction such as clean rooms has become a key bottleneck restricting production capacity release. Even if manufacturers decide to expand production now, new capacity release will take an 18-24 month cycle [4].

③

- Technological breakthroughs by domestic memory wafer manufacturers (Yangtze Memory Technologies Co., Changxin Memory Technologies) are accelerating the localization process in DRAM and NAND fields, but currently, domestic DRAM share is less than 5%, and domestic NAND Flash market share is less than 10%, leaving huge substitution space [4].

According to industry analysis, the tight supply-demand relationship will be more obvious in

[4]. This means:

• Short-term (2025-2026):
  High certainty of the industry’s upward cycle, with price increase trends continuing
• Mid-term (2026-2027):
  As new capacity is gradually released, supply-demand relations may tend to balance, but continuous growth in AI demand will still support industry prosperity
• Long-term:
  The cyclical nature of the industry will not change, but long-term growth in AI demand may lengthen the duration of the upward cycle

Attention should be paid to the risk of cycle downturn caused by factors such as macroeconomic fluctuations, lower-than-expected downstream demand, and excessive capacity expansion.

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Dongxin Semiconductor (688110) is positioned as

, focusing on the niche market of small-to-medium capacity and high reliability [1][2]. This differentiated positioning gives it obvious advantages in the following areas:

• High Reliability Requirements:
  Strict reliability requirements for automotive-grade and industrial-grade products form a natural barrier
• Small-to-Medium Capacity Niche Market:
  The three giants are gradually exiting mature processes, leaving market space for Dongxin Semiconductor
• Fields such as Network Communication and Industrial Control:
  Stable demand with relatively low price sensitivity

- The company’s SPI NAND and NOR Flash products can meet the strict requirements of automotive and industrial environments [2], with product lines covering:

• SLC NAND Flash (2xnm process)
• NOR Flash
• DDR3/LPDDR1/2 and other DRAM products

- Automotive-grade and industrial-grade products need to pass strict certification systems, forming high entry barriers

• In August 2024, Dongxin Semiconductor invested 200 million yuan of its own funds to increase capital in Shanghai Lishuan Technology, holding 37.88% of its shares [1]
• Lishuan Technology’s first self-developed chip ‘7G100’ has completed tape-out, achieving an OpenCL performance score of 111,290 under 6nm process, surpassing NVIDIA’s RTX 4060 score of 101,028 [1]
• Forming a ‘Memory + GPU’ strategic synergy, which can increase memory bandwidth by 50% through collaboration between memory chips and GPU [1]

This layout allows Dongxin Semiconductor to make a strategic leap from ‘niche memory expert’ to ‘domestic computing power base’, with potential for implementation in

[1].

According to public financial data:

• Asset-liability ratio is only 5.21%
  , with a stable financial structure [1]
• Gross profit margin is 21.92%
  , although lower than the industry average of 36.52%, it has room for improvement [1]
• The company is listed on the STAR Market, with continuous financing capacity

Low debt ratio provides strong risk resistance for the company in cycle fluctuations and funds for strategic investments (such as Lishuan Technology).

Against the background of Samsung, SK Hynix, and Micron tilting production capacity toward high-end products, leading companies in niche markets such as Dongxin Semiconductor [2].

The domestic substitution path follows a stepwise path of

[2], and is currently at the intersection of rapid substitution in niche markets and active breakthroughs in mainstream markets, where Dongxin Semiconductor is in a favorable position.

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1. High Industry Prosperity:
   The memory chip ‘super cycle’ will last at least until the end of 2026, with strong price increase expectations
2. Accelerated Domestic Substitution:
   Domestic memory market share is less than 10%, with huge substitution space
3. Precise Niche Market Positioning:
   Avoiding direct competition with giants, establishing advantages in high-barrier fields such as automotive-grade and industrial-grade
4. Forward-looking Strategic Layout:
   ‘Memory + GPU’ synergy opens long-term growth space
5. Financial Stability:
   Low debt ratio provides risk resistance

1. Industry Cycle Fluctuation Risk:
   The memory chip industry has obvious strong cyclical attributes; attention should be paid to the risk of cycle downturn
2. Technology Iteration Risk:
   Lishuan Technology’s GPU needs continuous R&D investment to maintain the technology window [1]
3. Valuation Risk:
   The company’s stock price rose by 291.19% in the second half of 2025 [6]; attention should be paid to valuation digestion
4. Capacity Expansion Constraints:
   Bottlenecks in infrastructure such as clean rooms may affect capacity release [4]

• Mass production progress and customer feedback of Lishuan Technology’s 7G100 chip in Q4 2025
• Performance elasticity from continuous price increases of memory chips

• Implementation progress of ‘memory + computing’ synergy effect
• Expansion of incremental businesses such as automotive-grade memory and WiFi7 joint computing
• Market share increase in the domestic substitution process

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The current upward cycle of the memory chip industry has strong sustainability,

, with core drivers being the explosive growth of AI computing power demand and structural adjustments on the supply side. Dongxin Semiconductor has obvious differentiated advantages in domestic memory chip competition with its precise positioning in the niche memory market, financial stability, and ‘Memory + GPU’ strategic layout. Investors should focus on the company’s market share increase in the domestic substitution process and the implementation of strategic synergy effects.

[1] Caifuhao - ‘Looking Forward to Lishuan GPU Mass Production’ (https://caifuhao.eastmoney.com/news/20251225145415861256970)

[2] Caifuhao - ‘In-depth Analysis of Memory Chips: Super Cycle, Industrial Restructuring, and Domestic Substitution Under the AI Wave’ (https://caifuhao.eastmoney.com/news/20251226142842989177420)

[3] 21st Century Business Herald - 'How Long Will the Memory Chip