GIGADEVICE (03986) rallied more than 8% during Tuesday morning trading, reflecting strong market enthusiasm following a new government policy initiative. At the time of writing, the stock was up 8.00% at HK$453.6, with trading turnover reaching HK$468 million.
The move comes after China's Ministry of Industry and Information Technology and the National Development and Reform Commission jointly released the 15th Five-Year Plan for the Development of the Electronic Information Manufacturing Industry. The plan calls for accelerating the development of advanced storage capabilities, promoting an architecture where storage enhances and substitutes for computing power, and improving the technical level of distributed and hyper-converged storage systems. It also emphasizes refining tiered data storage architectures and protocols.
Under the new blueprint, authorities aim to break through key technologies such as intelligent tiered storage, data sparsity optimization, and key-value caching. The plan also encourages the development of innovative storage products, including high-bandwidth flash memory, high-bandwidth DRAM, ferroelectric memory, resistive random-access memory, and magnetoelectric memory devices.
Analysts at Huatai Securities issued a research note highlighting that supply in the memory chip sector has remained tight in the second quarter, driving both shipment volumes and average selling prices higher across storage products. Additionally, MCU product prices have begun to rise modestly, contributing to a substantial sequential and year-over-year revenue increase for the company, with gross margins reaching 66.57%.
Looking ahead to the second half of 2026, Huatai anticipates that the industry upcycle will continue, with the company's niche DRAM, SLC NAND, and NOR Flash products expected to sustain combined growth in both volume and price. The brokerage also noted that custom storage projects are entering mass production in phases, which should drive strong earnings performance, and maintained a "Buy" rating on the stock.