(Yicai) July 10 -- GigaDevice Semiconductor said profit may have soared 12-fold in the first half from a year earlier, as China's leading flash memory chip designer benefited from a surge in sales and prices driven by the artificial intelligence boom.

Net profit was likely about CNY6.9 billion (USD1 billion) in the six months ended June 30 after a 177 percent jump in revenue to around CNY11.5 billion (USD1.7 billion), the Beijing-based company indicated yesterday.

The supply of memory chips was tight in the period, boosting profitability, GigaDevice said, adding that microcontroller shipments also benefited from growing demand in the industrial, consumer, and automotive sectors.

But GigaDevice also warned that the memory chip industry is historically cyclical. Future performance could be affected by shifts in supply and demand, posing a risk to profitability, it said.

Founded in 2005, GigaDevice is a fabless semiconductor leader specialized in flash memory chips and microcontrollers. Fabless chip businesses focus solely on design and outsource manufacturing to foundries.

GigaDevice’s shares [SHA: 603986] closed 7.8 percent lower at CNY612 (USD90.27) each in Shanghai today. Its Hong Kong-listed stock [HKG: 3986] tumbled 21 percent to end at HKD742.50 (USD94.72). Global memory chip stocks have been sinking this month.

GigaDevice hit a record high of CNY846.66 in Shanghai on June 29, but then fell 28 percent over seven straight trading days. Yesterday, it surged by the 10 percent daily trading limit after Chengxin Memory Technologies launched its CNY29.5 billion initial public offering, which is expected to become the second-largest IPO on Shanghai's seven-year-old Star Market.

In 2016, GigaDevice’s founder Zhu Yiming spearheaded the creation of Chengxin Memory Technologies, also known as CXMT, building what has become China's only maker of dynamic random access memory wafers able to produce at scale.

CXMT will open IPO subscriptions next week, setting July 16 as the date for both institutional and retail investors, it announced yesterday.

Editors: Dou Shicong, Futura Costaglione