GIGADEVICE Semiconductor Inc. (03986) saw its shares plummet 5.16% during Tuesday's intraday trading session. This sharp decline follows an extraordinary rally that had seen the memory chip leader's stock price surge dramatically in recent weeks.

The significant price correction comes after the company issued a public warning about trading risks associated with its stock. GIGADEVICE had experienced cumulative gains of 73.42% over ten consecutive trading days and an astonishing 125.60% increase over thirty consecutive trading days prior to the decline. The company explicitly cautioned investors about the risk of a rapid price correction following such substantial short-term appreciation.

According to the company's announcement, several fundamental factors contribute to the heightened risk. The memory chip industry exhibits significant cyclical volatility, and current product prices are already at historically high levels with unsustainable upward momentum. Furthermore, the company operates in the niche storage market where downstream demand has been suppressed during the price surge, and increasing marginal capacity is expected to lead to considerable price corrections. With a trailing P/E ratio of 200.17—substantially higher than the industry average of 128.83—valuation risks remain elevated amid these market dynamics.