Memory Chip Industry Enters Upturn; Domestic Players Accelerate Entry into Automotive Market

Since 2026, the global memory chip market has remained in a state of tight supply-demand balance, driving substantial increases in contract prices for both DRAM and NAND Flash. According to TrendForce data, general-purpose DRAM contract prices rose by 90%–95% quarter-over-quarter (QoQ) in Q1 2026, while NAND Flash contract prices climbed 55%–60% QoQ. The price surge significantly boosted industry profitability: Samsung Electronics, SK hynix, and Micron Technology reported Q1 2026 operating profits of KRW 53.7 trillion, KRW 37.61 trillion, and USD 5.24 billion, respectively. Their share prices surged in tandem, with each company’s market capitalization surpassing USD 1 trillion. Domestic memory companies have also benefited from this upcycle. In Q1 2026, Longsys reported revenue of RMB 9.9 billion, up 132.8% year-over-year (YoY), and net profit attributable to shareholders of RMB 3.862 billion, soaring 2,644% YoY. Its share price surged nearly sixfold within a year—from around RMB 70 to over RMB 500—lifting its market cap above RMB 210 billion. BIWIN Storage saw Q1 revenue jump 3.4x YoY, with gross margin rising to 53.3%. Damingli reported a fivefold YoY increase in Q1 revenue and a share price gain exceeding 150% year-to-date; both companies now boast market caps exceeding RMB 100 billion. ChangXin Technology posted Q1 revenue of RMB 50.8 billion and net profit attributable to shareholders of RMB 24.762 billion, turning profitable after prior losses. It is expected to list on the STAR Market in July–August 2026, with institutional valuations exceeding RMB 100 billion. Yangtze Memory Technologies Corp. (YMTC) has already begun IPO preparations, with market expectations placing its valuation between RMB 200 billion and RMB 300 billion. The automotive memory segment—long dominated by overseas suppliers—is now presenting structural opportunities. Soaring demand from AI servers for high-bandwidth memory (HBM) and premium DDR5 has prompted Samsung, SK hynix, and Micron to redirect 70%–80% of their advanced capacity toward AI-related products, tightening supply for automotive and traditional consumer memory applications. Multiple automakers now face rising costs and delivery delays, prompting price hikes for models such as the Xiaomi SU7 and Changan Qiyuan Q07. Amid this backdrop, domestic memory makers are accelerating their push into automotive-grade products. In June 2026, Longsys launched its self-developed controller-based automotive UFS 4.1 solution, supporting capacities up to 2TB and targeting intelligent cockpit applications. ChangXin Technology has completed AEC-Q100 certification for multiple automotive-grade DDR4/DDR5/LPDDR5 DRAM products and is already supplying BYD and NIO at scale. BIWIN Storage focuses on automotive SSDs, offering high-reliability solutions tailored for commercial vehicles and autonomous driving scenarios. Longsys has adopted a proactive safety-stock strategy, securing wafer capacity in advance to mitigate order volatility. Over ten domestically developed automotive memory products are currently undergoing validation at automakers, with domestic market share expected to rise meaningfully over the next 12–18 months. Chinese firms are prioritizing three key objectives: completing automotive-grade certifications, securing long-term contracts, and deepening supply chain collaboration. Automakers, in turn, are intensifying joint R&D efforts with local suppliers and locking in stable supply through long-term agreements. New global memory capacity is expected to come online en masse only by late 2027 to 2028, making it highly likely that the current supply-demand imbalance will persist through H1 2027. Overseas expansions are primarily focused on high-end AI memory, whereas Chinese players are simultaneously scaling capacity for both AI and automotive applications. ChangXin Technology’s Hefei fab continues ramping output; Longsys and BIWIN are prioritizing new production lines for automotive orders; and YMTC’s 12-inch wafer fab reached a monthly capacity of 140,000 wafers in Q2 2025, targeting a 15% global NAND market share by end-2026. Industry consensus holds that the current window represents not only a short-term profit opportunity but also a critical phase for domestic players to solidify technological capabilities, anchor customer relationships, and build ecosystems. Although overseas giants still dominate the high-end segment, coordinated efforts among multiple Chinese firms now enable them to meet the majority of automakers’ memory needs. Over the next 1–2 years, domestic suppliers must maintain reliable delivery while continuously enhancing automotive product performance and forging deeper partnerships with OEMs—transitioning from market-share gains to value creation.