by LIANG Baoxin

A global rally in memory-chip prices is sweeping through Shenzhen and Dongguan, China's manufacturing heartland for consumer electronics, lifting profits across the local supply chain. Factories are running at full tilt, and traders are betting the surge has further to run.

"Chip prices have jumped more than 70% in just two months—faster than gold," said an executive at Xincun Chengbang Technology, a unit of Chengbang Eco-Environment in Dongguan. "We expected net profit of 16 to 18 million yuan (about US$2.2–2.5 million) for the year, but now we're likely to reach 30 million."

The rally began in September as prices for DRAM—the high-speed working memory used in computers and servers—and NAND flash, the long-term data storage found in phones and solid-state drives, surged amid tightening supply.

According to market tracker TrendForce, DRAM prices jumped 171.8% year on year in the third quarter. In October, Samsung Electronics reportedly delayed contract prices for DDR5 chips, followed by K hynix and Micron Technology, pushing new quotes into mid-November.

Factory lines and full warehouses

After three years of falling prices and oversupply, China's module makers—mid-tier assemblers that package memory chips into ready-to-use products such as RAM sticks and SSDs—are finally catching a tailwind.

In Dongguan, production lines at Chengbang are running nonstop.

Financial filings show Chengbang's third-quarter net profit rose 128%, while Longsys posted a 1,994% surge to 698 million yuan, and Biwin returned to profit.

"The boom began at the wafer level," said a manager at a local factory, referring to the thin silicon disks on which memory chips are built—the raw substrate for the semiconductor industry. "AI data centers have soaked up much of the upstream supply, leaving less for consumer electronics."

Another manager noted, however, that profits still hinge on inventory strategy: "Only those who stocked up early really benefit."

Speculative fever in Shenzhen

The rally has also fueled speculative hoarding across Shenzhen's sprawling electronics markets, including Huaqiangbei, a trading district often called the barometer of China's gadget supply chain.

Dealers say investors have pooled hundreds of millions of yuan to stockpile high-capacity hard drives and memory modules, betting that prices will climb further before year-end.

"About 80% of agents I know are fully loaded," said a veteran distributor. "In this business, if you don't hold stock, you can't make money."

Prices have been moving almost daily. Since October, suppliers have warned that DDR5 memory could remain scarce until late 2025 as factories shift more capacity to high-bandwidth chips for AI servers.

Some traders are flipping inventory quickly to manage cash flow. "I might buy at 400 yuan and sell at 440," one said. "It's a fast game now."

Ripple effects and a long-awaited upcycle

The surge in prices is rippling through the supply chain. Shenzhen's device makers—assembling everything from smartphones to smart speakers—are facing higher costs as memory becomes more expensive.

"For phones with a 5% margin, a $20 increase in storage cost wipes out profits," said a manager at a local manufacturer. "For low-priced products like TV boxes, two memory chips can now cost more than the box itself."

A Guangzhou-based contractor said a chip that sold for US$3 last month now costs US$5. "We can still handle it, but small brands can't afford to stockpile."

Consumers are starting to feel it too. On JD.com, China's largest online retailer, a 1 TB solid-state drive that sold for 398 yuan in September now costs 549 yuan, up 38%.

Analysts say the current shortage could mark the start of a longer upcycle rather than a brief squeeze. Morgan Stanley forecasts the global memory market could reach US$300 billion by 2027, driven by AI computing demand.

"Over the next five years, the business will only get easier," said a Shenzhen distributor. "The recovery has just begun."