Rising Momentum in China’s Storage‑Chip Sector and Its Implications for Longsys

The Chinese storage‑chip market has entered a period of pronounced price expansion, a trend that is reverberating across the Shenzhen Stock Exchange. While Longsys Electronics (SZ:300601) has not yet moved decisively into the storage‑chip arena, the company’s broader semiconductor profile and recent trading dynamics warrant close attention.

1. Market‑wide Price Upsurge

  • Global Price Drivers – Major global players such as Samsung and Micron have announced price hikes for DRAM and NAND flash. Samsung’s 15 %–30 % DRAM price increase and Micron’s roughly 20 % rise in selected products have lifted global benchmarks.
  • Domestic Reaction – In China, the price surge has translated into a “super‑cycle” narrative, with analysts predicting sustained premium pricing through 2026. The domestic market is benefiting from a dual push: domestic demand recovery (data centers, AI servers) and the strategic goal of reducing reliance on foreign suppliers.

2. Stock‑Level Performance

  • Storage‑Chip Cluster Rally – On 21 Oct 2025, the storage‑chip theme surged, with key names such as Yachuang Electronics, Shuangyuan, Jiangbolong, and Shandong Lanke Tech posting gains above 10 %. The rally was supported by a 298 % year‑to‑date increase for Eastchip.
  • Contrasting Movements – Despite the overall theme strength, Longsys’s own stock closed at 181.91 CNY on 20 Oct 2025, down from a 52‑week high of 199.5 CNY. The company’s price‑earnings ratio of –450.23 underscores the challenges of profitability in a cycle where margins are still being established.

3. Longsys’ Position in the Value Chain

  • Core Business – Longsys primarily focuses on high‑frequency electronic components, including power modules, RF modules, and signal processing chips. Its expertise in high‑speed signal integrity and power management could serve as a complementary asset if the company chooses to diversify into storage‑related peripherals.
  • Competitive Landscape – Companies such as Jiangbolong have already capitalised on the storage‑chip boom by expanding into enterprise‑grade and high‑capacity DDR5, eSSD, and LPDDR4X/5X segments. Longsys would need to develop analogous capabilities or form strategic partnerships to capture a share of the rising demand.

4. Strategic Implications and Risks

  • Price Elasticity and Margin Pressure – While storage‑chip prices are rising, the market is also witnessing tightening supply. As noted in recent investor relations disclosures, the high consumption of wafer capacity by HBM and the cost of new fabrication plants could constrain long‑term supply growth, potentially sustaining margin pressure for suppliers.
  • AI and Data‑Center Demand – The AI‑driven “super‑cycle” narrative suggests sustained demand for high‑density memory. If Longsys were to enter this space, it would need to align product development with the specific requirements of AI servers and cloud data centres, which differ markedly from the consumer and automotive markets it currently serves.
  • Regulatory and Geopolitical Considerations – China’s push for self‑reliance in semiconductor components is accompanied by heightened scrutiny of supply chains. Longsys’ ability to navigate regulatory frameworks and secure domestic market share could be decisive.

5. Outlook

  • Short‑Term – The immediate near‑term outlook for Longsys remains uncertain. The company’s share price is likely to be influenced by broader market sentiment toward the storage‑chip theme, as well as any forthcoming corporate announcements regarding product diversification or capital allocation.
  • Medium‑Term – Should Longsys announce a strategic pivot toward storage‑related products or establish partnerships with leading storage manufacturers, its valuation could improve. Conversely, continued focus on its existing product lines may limit upside in a market where storage‑chip pricing and demand are the primary growth drivers.
  • Long‑Term – The sustained price increase projected through 2026 indicates that the storage‑chip sector will remain attractive for a few more years. Longsys’ ability to either enter this segment or enhance its complementary offerings (e.g., power modules for storage systems) will determine whether it can ride this wave.

In sum, the Chinese storage‑chip market is experiencing a robust price rally that has lifted many semiconductor names. Longsys, while not yet a storage‑chip player, sits within a broader ecosystem that could present both opportunities and challenges. Its future performance will hinge on strategic decisions that align its core competencies with the evolving demands of AI, data centres, and high‑performance computing.