Niche memory is benefiting from an explosive surge in AI demand and a shift in capacity allocation by major international manufacturers, entering a super-cycle of simultaneous volume and price increases. Domestic players like Dosilicon Co.,Ltd. and Ingenic Semiconductor Co., Ltd. are accelerating listings in Hong Kong and product upgrades to seize the window for import substitution.
Driven by the AI computing boom and a strategic pivot by global giants towards high-end memory, the supply-demand dynamics in the niche memory chip sector continue to tighten, formally ushering in a period of profit release with rising volumes and prices. The import substitution process is accelerating simultaneously.
The capital markets have reacted swiftly. As of June 2, 2026, the share prices of Puya Semiconductor(Shanghai)Co.,Ltd. (688766.SH), Gigadevice Semiconductor Inc. (603986.SH), and Dosilicon Co.,Ltd. (688110.SH) have surged by 5.57 times, 3.25 times, and 3.04 times, respectively, over the past year.
From an industry perspective, research information from several listed companies indicates a clear upward trend in niche memory prices for 2026, with related firms posting significant year-on-year profit growth in the first quarter. Some companies are concurrently advancing upgrades in both NAND and DRAM, expanding into diversified layouts such as multi-chip packaging and AI microcontrollers.
On the capital operations front, companies like Dosilicon Co.,Ltd. and Ingenic Semiconductor Co., Ltd. are accelerating their progress towards listings on the Hong Kong Stock Exchange, aiming to further broaden financing channels to support business expansion.
Supply-Demand Imbalance Fuels Price Increases
Compared to the mainstream memory chip market, which involves hundreds of billions of dollars, niche memory represents a "small but beautiful" segment. According to Frost & Sullivan estimates, the global market for specialized memory (including NOR Flash, SLC NAND Flash, niche DRAM, etc.) is projected to reach $15.7 billion in 2025. Within this, niche DRAM accounts for $9.9 billion, NOR Flash for $3.1 billion, and SLC NAND Flash for $2.7 billion.
Despite its limited scale, this segment is experiencing unprecedented growth opportunities due to the explosion in AI computing demand.
The core logic behind the current round of price increases in niche memory is the structural supply-demand imbalance triggered by AI demand. On the DRAM side, global memory majors are significantly shifting capacity towards high-margin products like DDR5 and HBM, actively scaling back niche DRAM production, leading to tightening supply. A Morgan Stanley research report released in May this year noted that DDR4 prices will continue their upward trend, potentially rising by 20% in the third quarter of 2026. The supply-demand gap is projected to be 19%–20% in the second half of 2026, maintaining at 18%–20% from 2027 to 2028.
In the NAND field, manufacturers have drastically reduced 2D NAND production to focus on 3D NAND. The resulting shortage in 2D supply has directly pushed up SLC NAND Flash prices. TrendForce analysts point out that following Samsung's announcement in Q1 2025 to halt 2D NAND production, MLC NAND prices have accumulated a 280% increase over approximately a year. SLC NAND is expected to have further room for about a 120% increase from Q2 to Q4 this year.
Simultaneously, the expansion of edge-side AI is driving demand for code storage, keeping NOR Flash supply tight and prices steadily rising.
Domestic Manufacturers Post Strong Results as Supply Chain Management Becomes Key
Currently, the primary products of domestic memory chip design companies are all in the niche segment. In the first quarter of 2026, benefiting from supply constraints and further price increases in the memory industry, domestic memory chip design companies collectively delivered impressive performance.
Gigadevice Semiconductor Inc., the company with the largest sales scale in the industry, reported Q1 revenue of RMB 4.188 billion, a year-on-year increase of 119.38%, and net profit attributable to shareholders of RMB 1.461 billion, surging 522.79% year-on-year. Its gross margin increased by 12.17 percentage points quarter-over-quarter to 57.08%.
Regarding future price trends, Gigadevice Semiconductor Inc. believes tight supply-demand conditions in 2026 will support continued price increases for niche DRAM, SLC NAND, and NOR Flash. After new niche DRAM capacity comes online in 2027, prices are expected to fluctuate at high levels, potentially moderating somewhat from their peak but remaining elevated.
The pace of price pass-through varies among companies. Ingenic Semiconductor Co., Ltd. noted that its memory chips primarily target industrial markets, where price adjustments are slower than in consumer markets. While domestic customers raised prices quickly in Q1, more overseas customers are expected to implement new prices in Q2 and Q3. The company forecasts that prices will continue to rise in subsequent quarters.
From the perspective of downstream application sectors, Puya Semiconductor(Shanghai)Co.,Ltd. identifies AI, new energy, industrial control, and automotive as four major sectors supporting memory demand. AI is the core growth driver. The industrial sector has completed a phase of bottoming out after previous destocking and weak demand, while overall automotive demand remains stable.
As chip design companies operate on a fabless model and do not produce chips themselves, the ongoing tight supply from wafer foundries tests their supply chain management capabilities. Dosilicon Co.,Ltd. adopts a "local depth, global breadth" supply chain strategy, establishing long-term, stable strategic partnerships with multiple renowned wafer foundries and packaging and testing plants both domestically and internationally.
Gigadevice Semiconductor Inc. has increased its procurement efforts. According to its disclosed 2026 routine connected transactions, it plans to purchase approximately RMB 5.7 billion worth of DRAM foundry services from ChangXin Memory Technologies (CXMT) for the full year, a significant increase from the RMB 1.18 billion actually transacted in 2025. This is primarily due to the evolution of its own product codes and the corresponding increase in wafer foundry costs amid overall industry supply shortages.
Import Substitution Accelerates from Product Upgrades to Diversified Layouts
Similar to trends in mainstream memory chips, niche memory is undergoing a critical juncture of product generation transition and upgrades, providing domestic manufacturers with a significant window to increase market share.
Starting from 2025, the explosion in AI demand has led international leading manufacturers to significantly shift capacity towards high-value product lines like HBM, DDR5, and 3D NAND, creating a pronounced supply shortage for planar NAND (2D NAND). In this context, domestic chip manufacturers have rapidly gained ground in the niche market.
Taking Gigadevice Semiconductor Inc. as an example, as international majors continued to reduce 2D NAND capacity in Q1 2026, the company's SLC NAND products entered a phase of shortage and price hikes, leading to a substantial sequential revenue increase. The company initiated capacity expansion in collaboration with suppliers starting in the second half of 2025, with capacity slowly being released in 2026 and expected to ramp up further in 2027. The company stated it will actively seize the opportunity to increase market share brought by the exit of major players from the 2D NAND market, expecting 2D NAND to become a new growth engine in the medium term.
Puya Semiconductor(Shanghai)Co.,Ltd. is simultaneously strengthening its high-end memory layout, having established SLC NAND Flash product lines across multiple process generations including 16nm, 32nm, and 41nm. Its products have passed platform verification by several large global clients. The company plans to continue perfecting its product matrix through process iteration and steadily increase market share in high-end consumer, industrial, and automotive-grade SLC NAND segments.
Notably, 3D DRAM is becoming an important direction for the high-end upgrade of niche memory. 3D DRAM can match the needs of AI servers, data centers, and edge computing devices, meeting requirements for high bandwidth, large capacity, and low latency. Its future application scenarios will gradually expand from servers to automotive electronics and AIoT fields. Ingenic Semiconductor Co., Ltd. is developing 3D DRAM to seek new product growth opportunities. However, the company indicated in an institutional research meeting on May 26 that due to overall tightness in DRAM capacity, the progress of wafer starts has been somewhat affected and currently appears delayed.
As the industry overall presents a differentiated pattern of "focusing on core business + diversifying expansion," several memory chip companies have begun extending beyond memory to build distinctive product lines. Microcontroller Units (MCUs) are a commonly targeted area.
At an earnings conference on June 1, Wang Nan, Chairman and General Manager of Puya Semiconductor(Shanghai)Co.,Ltd., stated that the focus of its memory chip business is to leverage advantages like ultra-low power consumption and high reliability, concentrating on products like NOR Flash and EEPROM to serve customers in consumer, industrial, home appliance, and automotive-grade fields. Its "Memory+" chip series, based on accumulated memory technology, expands into areas like MCUs, Drivers, and Sensors, building a more comprehensive product matrix. The company aims to transform from a "single-category product supplier" to a "full-category solution service provider," providing one-stop solutions for customers. Its path to high-end development mainly involves expanding into major and overseas clients, breaking into high-end industrial, white goods, human-machine interaction, and automotive fields, and improving product performance in core metrics like chip size, power consumption control, and read speed. It also aims to complete its product line through the acquisition of SHM, entering high-end client groups and segments.
AI empowerment is becoming the main theme of MCU upgrades. AI-MCUs combine real-time control logic with on-device AI inference, retaining the precise hardware control and ultra-low power consumption advantages of traditional MCUs while significantly enhancing AI algorithm processing capabilities through integrated Neural Processing Units (NPUs). Ingenic Semiconductor Co., Ltd.'s AI-MCU products are suitable for smart home, industrial control, medical, and other fields. Gigadevice Semiconductor Inc. plans to launch AI-MCU products with integrated NPUs, primarily targeting downstream customers in automation, digital energy, and AIoT.
Capital Empowerment: Dosilicon and Ingenic Sprint Towards H-Share Listings
Leveraging the favorable window in the niche memory industry cycle, leading domestic memory enterprises are accelerating their push for H-share listings, relying on capital markets to expand their strength and solidify global layouts.
Following Gigadevice Semiconductor Inc.'s initial listing on the Hong Kong Stock Exchange in early 2026, Dosilicon Co.,Ltd. began planning its Hong Kong listing on May 23. Ingenic Semiconductor Co., Ltd. submitted application documents to the Hong Kong Stock Exchange for the second time on May 26. The trend of these three domestic memory leaders "gathering in Hong Kong" has taken shape.
Niche memory, with its advantages of high reliability and customizability, holds irreplaceable positions in special scenarios like automotive-grade, industrial control, and aerospace, becoming a core tool for corporate differentiation. Dosilicon Co.,Ltd. adheres to a differentiated competition strategy in the NOR Flash and DRAM fields, with its NOR Flash products reaching a 48nm process and offering highly integrated, miniaturized storage solutions combined with MCP technology.
In its H-share application documents, Ingenic Semiconductor Co., Ltd. stated that the company has accumulated expertise in the 2D NAND field. For 3D NAND, product solutions like eMMC and UFS can already meet the needs of automotive cockpit and intelligent driving scenarios. It will subsequently develop 3D NAND products, aiming to become a core provider of automotive electronics and industrial memory chips.
Some companies are not stopping at traditional memory chips but are extending into computing chips to build a second growth curve. Dosilicon Co.,Ltd. has entered the high-performance GPU track through strategic investment, investing RMB 200 million of its own funds in Shanghai LISUAN in 2024 and adding approximately RMB 211 million in 2025. At a performance conference on May 12, the company stated that LISUAN Technology's first self-developed GPU chip, 7G100, completed its first tape-out in 2025 and achieved small-scale customer delivery of graphics cards. Mass production and market expansion efforts are currently progressing in an orderly manner.
The market generally judges this to be a "super cycle" lasting 2–3 years, with tight supply-demand conditions persisting at least until 2027. Citi expects the year-on-year growth rate for the average selling price of DRAM in 2026 to be significantly revised upward from a previous forecast of 53% to 88%.
For domestic manufacturers, the strategic tilt of international majors "abandoning the low-end to pursue the high-end" precisely provides a valuable market window for domestic niche memory companies. As design firms like Gigadevice Semiconductor Inc., Ingenic Semiconductor Co., Ltd., and Dosilicon Co.,Ltd. continue to deepen their focus in the niche track, the independent and controllable capabilities of domestic memory chips are expected to further improve, occupying a more important position in the global memory market.
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