On July 7, GigaDevice (03986.HK) fell 5.42% in regular trading to HKD 808.0, with turnover of HKD 218 million, extending the correction that began the previous week.

On the news front, the stock continues to face dual headwinds from market concerns over AI computing power oversupply and its elevated valuation. Meta's earlier announcement of plans to launch a cloud infrastructure business and sell surplus AI computing resources was interpreted as a signal that AI capital expenditure may have peaked, triggering a global sell-off across the computing power supply chain. The Philadelphia Semiconductor Index previously plunged 6.27% in a single session, while Micron dropped over 10%.

Additionally, GigaDevice issued a risk warning noting its trailing P/E ratio stands at 200x, significantly above the industry average of 128x. The company cautioned that storage chip prices are at historical highs, and as niche storage market capacity marginally increases, prices may decline considerably. The broader semiconductor sector remains under pressure, with peers including Montage Technology down 7.74%, SMIC down 1.85%, and Biren Technology down 2.76%.

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