(Yicai) May 27 -- Shares of Kaifa Technology rose to a new intraday record today after the Chinese firm said it plans to invest CNY1.5 billion (USD216.7 million) to expand its packaging and testing capacity for high-end storage chips to better serve strategic clients.

Kaifa [SHE: 000021] closed 2.9 percent up at CNY43.98 (USD6.48) in Shenzhen today, after hitting a new record of CNY47.03 in morning trading. The stock has surged 71 percent since the beginning of April, setting several new records over the past week.

The project will upgrade Kaifa’s high-end storage chip packaging and testing capabilities at its facilities in Shenzhen and Hefei, the largest independent dynamic random access memory packaging and testing company in China announced late yesterday.

The Shenzhen plant will add five million units of packaging capacity and eight million units of testing capacity a month, while the one in Hefei will add a monthly packaging capacity of 28.8 million units. The pre-tax payback periods will be around 8.8 years and 8.6 years, respectively.

The project in Shenzhen is scheduled to be put into operation in June next year, while the one in Hefei by the end of next year, according to Kaifa.

This new capacity expansion plan, the second in half a year, will meet growing demand for packaging and testing services, help strengthen customer loyalty, improve profitability, consolidate the company’s core competitiveness and market share in the high-end semiconductor packaging and testing segment, and generate notable synergies with existing businesses, Kaifa noted.

Last November, Kaifa invested CNY740 million (USD109.1 million) to hike its monthly testing capacity at the Shenzhen facility by five million universal flash storage chips and 4.3 million double data rate chips, and its monthly packaging capacity of high-end storage chips at the Hefei site by 17.8 million units.

Widening supply gaps for storage chips, fueled by the fast development of artificial intelligence computing power infrastructure, have prompted widespread capacity expansions across the industry.

Another major packaging and testing firm, Huatian Technology, announced on May 22 that it would spend CNY3 billion to give its Nanjing production base the capacity to handle another 430 million memory chips a year.

Editor: Futura Costaglione