In-Depth Analysis of the National Integrated Circuit Fund Phase II's Share Reduction in Biwin Storage

Based on the collected information, I will systematically analyze the reasons for the National Integrated Circuit Fund Phase II’s share reduction in Biwin Storage and its market impact.

On January 12, 2026, Biwin Storage (688525.SH) issued an announcement stating that National Integrated Circuit Industry Investment Fund Phase II Co., Ltd., a shareholder holding more than 5% of the company’s shares, plans to reduce its stake by no more than 9,342,600 shares, accounting for 2.00% of the company’s total share capital. The share reduction will be implemented through centralized bidding and block trading, with no more than 4,671,300 shares to be reduced via centralized bidding and no more than 4,671,300 shares via block trading. The reduction period is from February 4, 2026 to May 3, 2026 [1][2].

The reason for the share reduction disclosed in the announcement is “the company’s own operation and management needs” [1][2]. This statement is relatively common in share reduction announcements in the A-share market, but combined with the recent overall investment trends of the National Integrated Circuit Fund Phase II, there are deeper strategic considerations behind it.

The National Integrated Circuit Industry Investment Fund (commonly known as the “Large Fund”) has adopted an industrial investment model of “government first investment, supporting project growth, and exiting after maturity” since its establishment in 2014. At the current stage, the Large Fund is systematically exiting from mature semiconductor projects to recycle funds for the cultivation of next-generation technologies [3].

Recently, SMIC and Huahong Semiconductor announced almost simultaneously that they will acquire the minority stakes held by the Large Fund in their subsidiaries:

• SMIC
  will acquire a 49% stake in SMIC Beijing from sellers including the Large Fund for RMB 40.6 billion [3]
• Huahong Semiconductor
  will acquire a 38.4% stake in Shanghai Huali Microelectronics for RMB 8.3 billion, involving the National Integrated Circuit Industry Investment Fund Phase II [3]

As the number of participants in the semiconductor industry is increasingly crowded, capital allocation efficiency has become an important consideration. The Large Fund’s exit from mature projects and fund recycling helps optimize its overall investment portfolio and focus on more strategically significant emerging fields [3].

The Large Fund Phase II invested in Biwin Storage before its listing. Currently, Biwin Storage’s stock price is at a relatively high level (closing at RMB 126.5 on January 8, 2026), and exiting at this time can achieve considerable investment returns [4].

In Q3 2025, Biwin Storage achieved operating revenue of RMB 2.663 billion, a year-on-year increase of 68.06%; its net profit attributable to the parent company was RMB 256 million, a substantial year-on-year increase of 563.77% [4]. This shows that the company has benefited significantly from the AI-driven explosion in memory demand.

On January 8, 2026, the main capital of Biwin Storage had a net outflow of RMB 226 million, accounting for 10.33% of the day’s turnover, reflecting the market’s short-term negative reaction to the share reduction announcement [4].

The share reduction behavior of the National Large Fund is often regarded as an industry barometer by the market, which may trigger investors to re-examine the valuation of the semiconductor memory sector. Judging from cases of companies such as Tuojing Technology, the stock prices of companies did face certain pressure during the period of the Large Fund’s share reduction [5].

The shares to be reduced this time account for about 2% of Biwin Storage’s total share capital. Considering that the Large Fund Phase II previously held 6.9% of the company’s shares, its shareholding ratio will drop to about 4.9% after the reduction. Although it will still be an important shareholder, the decline in the shareholding ratio may affect the confidence of some institutions that follow the Large Fund’s investments.

Judging from the capital flow data, the market had already reacted before the share reduction announcement was released, with main capital showing a net outflow status, and the company’s valuation may face certain pressure in the short term [4].

• Memory chip prices continue to rise
  : According to the latest forecast from TrendForce, the contract prices of DRAM and NAND in Q1 2026 will increase by 55-60% and 33-38% respectively [6]
• Samsung and SK Hynix raise prices significantly
  : South Korean media reported that the DRAM quotation of the two companies in Q1 2026 will increase by 60%-70% compared with Q4 2025 [6]
• Rise of domestic memory leaders
  : ChangXin Memory Technologies is expected to achieve revenue of RMB 55-58 billion and net profit of RMB 2-3.5 billion in 2025, with its global DRAM market share reaching 3.97% [7]

The exit of the Large Fund is the normal end of its investment cycle, and does not represent a bearish view on the industry’s prospects. In fact, the Large Fund is investing the recycled funds in more forward-looking fields, such as core materials and advanced manufacturing [8].

• At the start of 2026, the A-share market performed strongly, with the Shanghai Composite Index breaking through 4,100 points, hitting a new high in nearly 10 years [9]
• Public funds have already laid out positions in semiconductor chip stocks in advance, and some funds rose by more than 20% in the first week of 2026 [9]
• Memory chips are regarded by institutions as one of the important investment themes for 2026

1. Reason for Share Reduction
   : The National Large Fund’s share reduction in Biwin Storage is a normal reflection of its periodic exit strategy, and has nothing to do with the company’s fundamentals.

2. Short-Term Impact
   : Market sentiment and capital side may face certain pressure, but the impact is limited.

3. Long-Term Value
   : The memory chip industry is in an upward cycle of prosperity, and as a leading domestic memory module company, the company still has good growth potential.

• Risk of memory chip price fluctuations
• Risk of intensified industry competition
• Risk of macroeconomic uncertainty
• Risk of stock price fluctuations during the share reduction period

• Market reaction after the official start of the share reduction in February 2026
• The company’s Q4 and full-year performance
• Memory chip price trend
• IPO progress of leading enterprises such as ChangXin Memory Technologies and Yangtze Memory Technologies

[1] Phoenix Net Finance - Biwin Storage: National Integrated Circuit Fund Phase II Plans to Reduce Stake by No More Than 2% (https://finance.ifeng.com/c/8prOcokZ4j2)

[2] Sina Finance - Biwin Storage: National Integrated Circuit Fund Phase II Plans to Reduce Stake by No More Than 2% (https://finance.sina.com.cn/roll/2026-01-12/doc-inhfzysv5706592.shtml)

[3] Yahoo Finance - SMIC, Huahong Repurchase Government Investment, Semiconductor Integration Wave is Rising (https://hk.finance.yahoo.com/news/中芯-華虹回購政府投資半導體整合潮方興未艾-041906121.html)

[4] Stock Star - Biwin Storage (688525): Main Capital Net Sold RMB 226 Million on January 8 (https://www.163.com/dy/article/KIQNFMF60553O7RC.html)

[5] Tencent Securities - Tuojing Technology Stock Bar (https://gu.qq.com/sh688072)

[6] NetEase Finance - Memory Chip Prices Remain Strong at the Start of 2026 (https://www.163.com/dy/article/KILP2NMN051984TV.html)

[7] Securities Times - “First Memory Chip Stock” Epic IPO! RMB 300 Billion ChangXin Memory Technologies is Coming (https://www.stcn.com/article/detail/3571683.html)

[8] Caijing - Layout and Prospects of Semiconductors, Aerospace and AI Chips (https://caifuhao.eastmoney.com/news/20260110195756404839410)

[9] Securities Times - “Jump the Gun”! 10 Funds Rose Over 20% in the First Week of the Year! (https://www.stcn.com/article/detail/3585432.html)