The memory chip market is currently riding a wave of unprecedented prosperity.

Against this vibrant backdrop, industry leaders are accelerating their pace to embrace the capital market. GigaDevice, the undisputed 'leader' in the memory chip sector, is now just one step away from its highly anticipated Hong Kong Stock Exchange IPO.

On December 17, GigaDevice made a significant announcement, revealing that it had published the post-hearing information pack on the Hong Kong Stock Exchange's official website. This move signifies that the company has successfully navigated through the most crucial hearing stage.

According to the Main Board Listing Rules of the Hong Kong Stock Exchange, the validity period of a listing application form is capped at six months. GigaDevice submitted its listing application on June 19 of this year, reaching the six-month milestone on December 19. Consequently, the link to the post-hearing information pack would have automatically become invalid on that date.

Media reports suggest that GigaDevice had the option to update the form and publish the post-hearing information pack simultaneously on December 19. However, to ensure the completion of the prospectus registration process before the year-end deadline of December 31, GigaDevice opted to disclose the post-hearing information pack on December 17 and initiate the registration process promptly.

From a financial standpoint, GigaDevice boasts a substantial cash reserve. Therefore, the urgency for this Hong Kong listing is not particularly pressing. Financial data reveals that as of the end of the third quarter this year, GigaDevice's monetary cash had surged to RMB 10.01 billion, marking an 8.07% year-on-year increase. Over a more extended period, its monetary cash has reached an all-time high.

Moreover, propelled by the rising prices of memory chips, GigaDevice's performance has been nothing short of impressive.

In the first three quarters of this year, GigaDevice achieved revenue of RMB 6.832 billion, reflecting a 20.92% year-on-year increase, and net profit of RMB 1.083 billion, up 30.82% year-on-year. In the third quarter alone, the company recorded revenue of RMB 2.681 billion, a 31.4% year-on-year surge, and net profit of RMB 507.8 million, a remarkable 61.13% year-on-year increase.

The 'Hidden Champion' in the Chip Industry

In the high-growth semiconductor industry, GigaDevice may not enjoy widespread recognition.

However, despite not being as prominent as industry giants like TSMC or Intel, GigaDevice's strength and capabilities should not be underestimated.

According to reports, GigaDevice stands out as one of the few chip design companies globally that ranks among the top ten in the four major segments of NOR Flash, SLC NAND Flash, niche DRAM, and microcontrollers (MCUs). This achievement underscores its significant role in the global semiconductor industry.

GigaDevice's journey can be traced back to around 2004. At that time, the global memory market was virtually monopolized by U.S. and Japanese companies, and the domestic semiconductor industry faced significant constraints in the memory chip segment. Zhu Yiming, armed with technical expertise accumulated in Silicon Valley, returned to China with a bold vision and founded GigaDevice Semiconductor (Beijing) Inc., the predecessor of the current GigaDevice.

However, establishing a foothold in the semiconductor field is no easy feat.

Initially, GigaDevice focused on SRAM (Static Random-Access Memory), a high-performance chip used for caching. Despite its technological lead, the company encountered challenges in market promotion due to its startup status.

Faced with these difficulties, Zhu Yiming made a strategic decision to adjust the company's direction. Leveraging SRAM's low-cost and low-power advantages, GigaDevice targeted the general consumer market. This pivotal decision helped the company successfully navigate through the tough times.

GigaDevice's true takeoff began when it fully committed to the SPI NOR Flash market segment. NOR Flash is a type of memory chip with 'execution' capabilities, storing the initial boot code when a device is powered on. Its importance is self-evident. In May 2008, GigaDevice successfully launched China's first 8M SPI NOR Flash chip, which found widespread applications in various scenarios, including mobile phones, PCs, DVDs, USB keys, set-top boxes, network equipment, and IoT devices. Since then, GigaDevice has officially embarked on its remarkable rise in the NOR Flash field.

Over the next few years, GigaDevice's NOR Flash business entered a rapid growth phase, characterized by an increasingly diverse product line and continuously improving process technology. According to reports, GigaDevice achieved mass production of SPI NOR Flash in 2009. In 2010, it introduced chips with capacities ranging from 512K to 32M, and its memory product sales exceeded 100 million units that year. By 2013, GigaDevice was mass-selling products based on the 65nm process, with annual memory product sales reaching approximately 810 million units and cumulative shipments surpassing 1.7 billion units. That same year, GigaDevice took the lead in launching SPI NAND Flash products, solidifying its leading position in China's NAND Flash design industry. It also emerged as China's largest serial NOR Flash design company and 32-bit MCU supplier.

Besides its strong presence in the memory chip sector, GigaDevice's strategic布局 (strategic move) in the MCU field should not be overlooked. MCU, or microcontroller, can be simply understood as a 'microcomputer on a chip' and serves as the control core of intelligent devices. In 2013, when the NOR Flash market showed signs of reaching its growth ceiling, GigaDevice made a crucial decision to enter the 32-bit general-purpose MCU market. This move was driven by GigaDevice's determination to achieve industrial synergy and expansion. According to reports, an MCU often requires embedded memory units (Flash), and GigaDevice itself is a memory expert.

Leveraging its cost-effectiveness and rapid iteration capabilities, GigaDevice's GD32 MCU series has achieved remarkable success. It now offers over 700 models, with cumulative shipments exceeding 2 billion units, firmly ranking first in China's 32-bit general-purpose MCU market.

As its business has gradually matured, the revenue contribution from GigaDevice's MCU business has risen from a single-digit percentage in the early days to approximately 23% in 2024, successfully creating a strong 'second growth curve.' Especially amid the current wave of AI penetration into terminal devices, the company's MCUs integrated with AI computing modules are meeting emerging demands from humanoid robots, AI toys, and other new applications.

A New Narrative with an International 'Perspective'

Currently, GigaDevice has emerged as a 'hidden champion' in the memory chip sector.

According to a Frost & Sullivan report, based on sales in 2024, GigaDevice is the only integrated circuit design company worldwide that ranks among the top ten in the four major segments of NOR Flash, SLC NAND Flash, niche DRAM, and MCUs. Among them, it ranks second globally and first in China in the NOR Flash field; and eighth globally and first in China in the MCU field.

However, despite holding a high market position domestically, GigaDevice still has significant room for growth from a global perspective.

Currently, domestic semiconductor companies generally face a 'large industry, small market share' pattern in global competition. Taking MCUs as an example, although GigaDevice ranks eighth globally, its market share is a mere 1.2%. The top five global MCU companies collectively occupy over 80% of the market, indicating that GigaDevice is still a challenger and needs to survive in a market dominated by industry giants.

Additionally, GigaDevice needs to address its shortcomings. Firstly, its performance is highly dependent on the strong cyclicality of memory chips. The semiconductor industry, especially memory chips, exhibits significant cyclical fluctuations, with periods of prosperity followed by downturns, and essentially undergoing a value restructuring every four years.

Looking back at 2022 and 2023, the entire semiconductor industry was in a downturn, and GigaDevice's profits fluctuated accordingly. It only regained vitality after gradually reducing inventories in 2024. This year, driven by significant price increases in memory chips, GigaDevice has achieved substantial performance growth.

Unlike most chip companies that rely on the 'domestic substitution' market, GigaDevice's business is highly dependent on the international market, with a sales network covering Europe, the Americas, and Asia. Its clientele includes global consumer electronics giants like Samsung and numerous overseas automotive companies. According to specific data, in 2024, GigaDevice's revenue from overseas regions reached RMB 5.702 billion, accounting for a substantial 77.52% of its total revenue.

Perhaps considering these issues, GigaDevice chose to list in Hong Kong despite holding over RMB 10 billion in funds. According to the prospectus, the proceeds from the listing will be used to advance the construction of its international headquarters in Singapore, enhance global brand recognition, and expand its sales network in key markets such as the United States, Japan, and South Korea. In the semiconductor industry, which highly values reputation and long-term cooperation, brand recognition is a crucial threshold. Achieving a dual listing on 'A+H' shares is itself a powerful brand endorsement, helping GigaDevice secure a 'ticket' to compete on the same stage as international giants like Infineon and STMicroelectronics.

Overall, the market is relatively optimistic about GigaDevice's Hong Kong IPO. As of the latest closing, the total market value of GigaDevice exceeds RMB 145 billion, with an intra-year increase of over 105%.