Summary of Key Points
In July 2026, two memory chip companies founded by the same entrepreneur, Zhu Yiming—Changxin Technology and GigaDevice Technologies (GDTE)—experienced vastly contrasting fortunes on the A-share market: Changxin Technology launched its shares on the STAR Market at an issue price of 8.66 yuan, soaring 471% on its first day and briefly surpassing Tencent in market value to become the largest company on the A-share market; in contrast, GDTE's stock price plummeted by nearly 60% within a month of Changxin's listing, resulting in a loss of over 340 billion yuan in market value. The underlying reasons are as follows:
Changxin Technology, as China's only company to have achieved mass production of DRAM (Dynamic Random Access Memory), has been eagerly sought after by investors due to its scarcity and impressive performance. GDTE, previously considered a "shadow stock" (an investment vehicle that allowed investors to indirectly bet on Changxin before it went public), saw its premium disappear with Changxin's official listing, coupled with industry adjustments, leading to a significant drop in its stock price.
I. Changxin Technology: Why the New King of the A-share Market?
Changxin's success is not accidental; it stems from a combination of three key factors:
1. Scarcity that breaks a 30-year monopoly: The global DRAM market has been dominated by Samsung, SK Hynix, and Micron for 30 years, with these companies holding more than 90% of the market share. Changxin is the only company on the Chinese mainland capable of mass-producing DRAM, and its market share reached 8% in the first quarter of 2026, giving China a significant say in this industry for the first time. This unique position has attracted high valuations from investors.
2. Performance turnaround from losses to profitability: Despite accumulating losses of over 30 billion yuan in the previous three years (a common phenomenon in the early stages of the chip industry), Changxin reported its first profit in 2025, with revenue increasing by 719% and net profit by 1688% in Q1 2026, effectively reversing ten years of losses. This indicates that its production capacity and products are now generating profits.
3. Capturing the AI boom: The growing demand for memory in AI applications has led to a surge in global storage chip prices. According to Industrial Securities, the supply-demand gap for DRAM is expected to reach 7.22% in 2026, and this trend is set to continue into 2027. Changxin is well-positioned to benefit from this growth.
These factors enabled Changxin to surpass companies like Moutai and CATL on its listing day, becoming the company with the highest market value on the A-share market and setting new records such as the highest single-day trading volume and the largest IPO on the STAR Market.
II. GDTE: Why from a Favorite to an Outcast?
GDTE's sharp decline reflects the collapse of the "shadow stock" narrative:
1. Once a substitute for Changxin: Before Changxin went public, investors could not directly invest in it, so they turned to GDTE, which was related to Changxin through shareholding (GDTE owns 1.62% of Changxin's shares). As a result, GDTE's stock price soared from 55 yuan to 846 yuan between February 2024 and June 2026, a 14-fold increase, largely due to the premium associated with its status as a substitute for Changxin.
2. The end of the shadow effect: With Changxin's public offering, investors had direct access to its shares, reducing demand for GDTE. On Changxin's listing day, GDTE's trading volume was significantly lower, and many funds shifted to Changxin.
3. Industry adjustments: The global storage industry is undergoing changes; for example, SK Hynix' better-than-expected financial results did not translate into a rise in its stock price. As a company in the storage sector, GDTE was also affected by these trends.
Therefore, GDTE's decline represents a return to its fair market value after the premium associated with its status as a substitute for Changxin disappeared.
III. The Complex Relationship Between the Two Companies
Zhu Yiming founded both GDTE and Changxin, and the two companies are closely linked:
- Shareholding: Zhu Yiming holds 5.13% of GDTE and 2.38% of Changxin; GDTE also owns 1.62% of Changxin.
- Business synergy: GDTE specializes in NOR Flash (small-capacity memory for smartphones and the Internet of Things) and MCUs (microcontrollers), while Changxin focuses on DRAM (large-capacity memory). They are partners in the storage industry chain.
However, this relationship became a disadvantage for GDTE after Changxin's listing, as investors no longer needed to use it as an indirect investment vehicle.
IV. Opportunities and Challenges for China's Storage Industry
Changxin's listing is a milestone for China's storage industry, but challenges remain:
1. Technological gaps: Although Changxin has achieved mass production of DRAM, it still lags behind leaders like Samsung and SK Hynix in cutting-edge technologies (such as HBM memory, essential for AI servers). Samsung has already begun large-scale deployment of HBM, while Changxin is still in the research and development phase.
2. Industry cycles: The storage chip market is highly cyclical; current demand and prices may reverse in 2027-2028 as both Changxin and Korean giants expand production, potentially leading to oversupply and price drops. Changxin's prospectus highlights this risk.
3. The mission of domestic substitution: China accounts for 34% of the global DRAM market demand, but only 23% is domestically produced. As the sole domestic DRAM manufacturer, Changxin plays a crucial role in replacing imports.
Changxin's listing marks a new beginning for China's storage industry as it seeks to challenge global leaders.
V. Short-Term Market Emotions and Long-Term Rationality
The recent fluctuations in the two companies' stock prices are driven by short-term factors:
- Changxin's surge reflects capital excitement about China's breakthrough in DRAM technology and industry trends.
- GDTE's decline is due to the elimination of the premium associated with its status as a substitute and the shift in investor preferences.
In the long run, the market will return to rationality. The cyclical nature of the storage industry means that the companies' profits will fluctuate, and their stock prices will ultimately be determined by their core competitiveness—whether Changxin can close the technological gap and maintain profitability, and whether GDTE can continue to expand its market share in NOR Flash and MCU markets.
In summary, this contrast between Changxin's success and GDTE's decline illustrates China's storage industry's journey from catching up to making significant breakthroughs. Regardless of short-term price movements, a new era for China's storage industry has begun.