Introduction: A single day witnessed both projected earnings growth and the initiation of an overseas investigation.

July 16th was predestined to be a day filled with significant events for Montage Technology.

In the evening, a robust earnings preview once again drew market attention to this pivotal player in the AI industry chain.

According to the preview, Montage Technology anticipates achieving approximately RMB 3.335 billion in operating revenue for the first half of 2026, marking a year-on-year increase of around 26.6%. It projects a net profit attributable to shareholders of listed companies for the same period to range between RMB 1.900 billion and RMB 2.100 billion, representing a year-on-year surge of 63.9% to 81.2%.

The growth in revenue and improvement in profitability underscore the ongoing realization of benefits from the new wave of AI infrastructure construction.

Nevertheless, another piece of news that emerged on the same evening swiftly dampened market enthusiasm.

The company disclosed that the Fair Trade Investigation Department of the Seoul Central District Prosecutors' Office in South Korea conducted an on-site search and evidence collection at Montage Technology's Korean office concerning potential breaches of antitrust regulations. The company has yet to receive any accusations of wrongdoing from the prosecutors' office or any governmental entity regarding the company, its directors, or employees, and its operations continue uninterrupted.

On one hand, there is sustained high earnings growth; on the other, uncertainty has abruptly arisen.

The capital market's response was swift and direct.

On July 16th, Montage Technology's stock price plummeted by 16.44%, equating to a single-day market value loss of over RMB 50 billion.

Subsequently, the company's Chairman and CEO, Yang Chonghe, unveiled a share repurchase plan ranging from RMB 300 million to RMB 600 million, aiming to convey confidence to the market.

Within a single day, three pivotal keywords—earnings, investigation, and repurchase—became intertwined.

Montage Technology now faces a formidable challenge.

01 Success Attributed to AI

Over the past two years, Montage Technology's most prominent identity has been its association with AI.

Within the AI industry chain, NVIDIA supplies GPUs, TSMC manages advanced manufacturing, while Montage Technology occupies a crucial yet often overlooked position: server high-speed interconnectivity.

The company's core offerings include memory interface and memory module support chips. In essence, within a server, the data transmission between the CPU, GPU, and high-speed memory hinges on high-speed interconnect interfaces.

With the burgeoning demand for AI large model training and inference, servers have imposed heightened requirements on memory capacity, speed, and data throughput capabilities, positioning DDR5 as a pivotal direction for industrial advancement.

Montage Technology fortuitously capitalized on this technological transition.

Data reveals that in 2024, the company achieved RMB 3.639 billion in operating revenue, marking a year-on-year increase of 59.2%; its net profit attributable to shareholders reached RMB 1.412 billion, representing a year-on-year surge of 213.1%. In 2025, the company sustained its rapid growth trajectory, attaining RMB 5.456 billion in operating revenue, a year-on-year increase of 49.94%; its net profit attributable to shareholders amounted to RMB 2.236 billion, a year-on-year rise of 58.35%.

Excluding the impact of share-based compensation, the company's net profit attributable to shareholders soared to RMB 2.647 billion in 2025, marking a year-on-year increase of 81%—an outstanding performance. The primary driving force behind this growth stemmed from: heightened DDR5 penetration, escalating demand for AI servers, and a significant surge in the volume of high-speed interconnect chips.

The company disclosed that in 2025, its interconnect chip product line generated RMB 5.139 billion in sales revenue, marking a year-on-year increase of 53.4%, becoming the company's foremost revenue source.

In the first half of 2026, Montage Technology's earnings growth continued to be propelled by the same underlying logic.

On one hand, with increased DDR5 penetration and ongoing sub-generation iterations, the company's shipments of DDR5 RCD chips witnessed a substantial uptick, with the proportion of third- and fourth-generation RCD chip shipments rising further. On the other hand, revenue from new products, including MRCD/MDB, PCIe Retimer, CKD, and CXL MXC chips, exhibited notable growth.

Over the past two years, Montage Technology has reaped the rewards of a typical industry chain dividend: an uptick in AI server construction, rising server memory demand, and DDR5 swiftly supplanting DDR4.

As a key supplier, Montage Technology naturally emerged as one of the primary beneficiaries.

02 A Question That Must Be Addressed Sooner or Later

Montage Technology's business model bears resemblance to selling "shovels" amidst a semiconductor gold rush.

During the gold rush era, those who consistently reaped stable profits were often not the gold miners but the purveyors of tools.

The same principle applies in the AI era.

The market fixates on NVIDIA's GPUs and also pays heed to server systems, optical modules, and other segments.

However, within the vast AI infrastructure landscape, there exist numerous critical components, with memory interface chips being one of them.

Nevertheless, unlike GPUs, which dictate computational power limits, memory interface chips primarily fulfill a connecting role. Their significance is undeniable.

Yet, their growth potential remains subject to industrial cycles.

NVIDIA sells more GPUs, cloud providers ramp up capital expenditures, AI server demand escalates, server memory demand surges, and ultimately, this传导 (translates) to Montage Technology.

This forms a cohesive industry chain where a slowdown in growth at any juncture impacts final demand.

Consequently, the queries that genuinely concern the market have evolved.

Previously, the focus was on whether there existed demand for AI; now, the emphasis has shifted to how long AI demand can sustain its rapid growth trajectory.

A recurring pattern in the semiconductor industry is that during the nascent stages of technological upgrades, leading companies often experience rapid growth, with the market expanding swiftly, competition not yet stabilized, and profit margins remaining elevated.

As the technology matures, growth rates gradually normalize—the same holds true for DDR5, which is fortunate to still be in the penetration enhancement phase.

However, in the future, when DDR5 gradually becomes a standard server configuration, can the company sustain its current growth rate? This is a query that Montage Technology must address sooner or later.

03 Searching for a Second Growth Curve

For growth-oriented tech companies, the paramount risk is not declining growth but being reliant on a singular growth curve.

Over the past two years, Montage Technology's primary growth curve has been unmistakable: DDR5.

However, the company also acknowledges that relying solely on a single technological cycle is arduous for sustaining long-term growth.

Hence, new avenues are emerging: MRCD/MDB, PCIe Retimer, CKD, and CXL MXC.

Behind these products lies the increasingly intricate high-speed interconnect needs of AI servers.

As AI server architectures continue to evolve, the scale of data exchange between GPUs, between GPUs and CPUs, and between chips and storage continues to expand, elevating the significance of high-speed interconnectivity.

If these products can generate substantial revenue, Montage Technology's future development paradigm will shift: from a company benefiting from the DDR5 cycle to an AI infrastructure high-speed interconnect platform company.

This is also the core rationale behind the market assigning growth valuation to the company.

However, challenges persist.

A vast market space does not inherently guarantee a company's dominance within it.

The ultimate competition in the chip industry hinges on: technology, customers, ecosystem, scale, and continuous iteration capabilities.

04 Re-evaluating

For capital markets, the greatest pressure on outstanding companies often stems not from subpar past performance but from exceptionally stellar past performance.

When a company experiences rapid growth for multiple consecutive years, the market continuously elevates its expectations.

At this juncture, investors no longer focus on whether there is growth but on whether growth can still surpass expectations.

Montage Technology currently finds itself at this crossroads.

Over the past two years, the company has basked in the glow of: the AI wave, DDR5 upgrades, escalating server demand, and rising valuations.

However, moving forward, the company must address three pivotal questions.

Firstly, how long can the DDR5 dividend endure?

If DDR5 continues to gain traction, the company can still anticipate growth; however, if the industry matures, growth rates may decline.

Secondly, can new products assume the mantle?

If products like PCIe Retimer and high-performance connectivity chips continue to gain momentum, the company has the opportunity to unlock new growth avenues; otherwise, the market may redefine it as a cyclical semiconductor company.

Thirdly, can global operations withstand scrutiny?

This incident remains under investigation, and the company has stated that operations remain unaffected. However, for a global chip company, alterations in overseas regulatory environments can still influence market sentiment.

05 The Signal Behind the Repurchase

Faced with significant stock price corrections, Montage Technology opted to repurchase shares.

On July 16th, the company's Chairman and CEO, Yang Chonghe, proposed a share repurchase plan ranging from RMB 300 million to RMB 600 million.

For a company with a market value exceeding RMB 260 billion, this funding scale does not dictate the company's valuation.

However, the market's focus lies not on the amount but on the signal.

Following the rapid stock price adjustment, management expressed confidence in the company's long-term value through the repurchase.

Nevertheless, repurchases can only enhance short-term sentiment; what truly determines valuation is future fundamentals.

If the company can consistently demonstrate in the coming quarters that AI demand remains robust, DDR5 upgrades continue to progress, and revenue from new products keeps growing, then this adjustment may merely constitute a fluctuation in the growth stock cycle.

Conversely, if the AI industry enters a slowdown phase and new products fail to compensate, valuation pressures will persist.

06 The Crucial Test

Over the past two years, Montage Technology has substantiated one fact: it has capitalized on the AI wave.

However, moving forward, it must substantiate another: it can continue to grow even as industrial waves shift.

If products like MRCD/MDB, PCIe Retimer, and CXL successfully assume the lead, the company may evolve from a beneficiary of the DDR5 era into a pivotal chip platform company in the AI infrastructure era.

However, if growth remains predominantly reliant on the DDR5 cycle, the company may revert to the logic of a cyclical semiconductor stock.

The uncertainty introduced by the South Korean investigation adds an additional layer of complexity to current market sentiment.

For investors, what genuinely matters is not a solitary figure in a quarterly or semi-annual report.

Instead, it is the extent to which AI dividends can still be unlocked in the coming year, whether a second growth curve can materialize, and whether global competition can be sustained.

The semiconductor industry is replete with hype; what is truly scarce are companies that can sustain growth after the hype subsides.

Transitioning from the DDR5 era to the AI high-speed interconnect era, Montage Technology is undergoing a pivotal transformation.

As for whether the transformation will succeed? The answer will gradually unfold in the earnings results of the coming quarters.