Gigadevice Semiconductor (603986 CH) Buy: Structural tailwind continues

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Gigadevice Semiconductor (603986 CH) Buy: Structural tailwind continues

4.8 21.9

edge AI applications and (2) the larger memory capacity required due to the rising ROE (%) 9.3 24.5 22.8 21.1

complexity in systematic codes. Currently GD accounts for c20% of global market

52-WEEK PRICE (RMB)

share (source: company earnings call), and it aims to expand this to c25% in 3-5

years with the support of its foundry partners. SLC NAND structural dynamics also 490.00

support a strong outlook. As per TechNews on 31 March, Kioxia is systematically 280.50

phasing out its legacy NAND portfolio with last orders expected by September 2026.

71.00

Also, Micron is reallocating capacity toward high-value 3D NAND products. We 05/25 11/25 05/26

believe the exit of major suppliers underpins elevated pricing and will release c25% Target price: 441.20 High: 350.16 Low: 112.30 Current: 334.10

of global capacity for suppliers like GD to capture over the next 2-3 years. Source: LSEG IBES, HSBC Qianhai Securities estimates

DDR4/LPDDR4 remain undersupplied. Thanks to the continued price uptrend, GD’s

DRAM business remains robust, with high-capacity DDR4 (8Gb) and LPDDR4 (2Gb to Cara Su* (Reg. No. S1700525070001)

Analyst, A-share IT Hardware Research

ramp up in 2H26 as per GD’s earnings call) being the near-term focus for product mix HSBC Qianhai Securities Limited

optimisation. We expect the supply shortage to persist until 2028. Backed by its stable cara.z.h.su@hsbcqh.com.cn

relationship with CXMT, GD is one of the few companies that can expand DDR4 +86 21 50662080

capacity in 2026-28. Meanwhile, GD’s customised DRAM for automotive and AI Steven Sun*, CFA (Reg. No. S1700517110003)

Head of Research, HSBC Qianhai Securities Limited