Core Viewpoint - The stock of Zhaoyi Innovation (03986) surged over 7% in early trading, reaching a new high of 295 HKD, driven by positive market sentiment regarding the semiconductor industry and supply-demand dynamics in storage chips [1] Industry Summary - According to a Morgan Stanley research report, the supply-demand gap for traditional storage chips is continuing to widen, with a new super cycle expected in the industry from Q2 2025 to 2026 [1] - Products such as DDR4, DDR3, NOR Flash, and SLC/MLC NAND are experiencing increasing supply tightness, and there are no pessimistic indicators in the market [1] - The demand for advanced process storage products (e.g., DDR5, HBM) is strong, which is squeezing the allocation of mature process capacity [1] - In January 2026, major companies are expected to have a positive procurement attitude towards DDR4, with potential price increases of up to 50% in Q1 due to supply constraints [1] Company Summary - Zhaoyi Innovation is projected to hold the largest market share in NOR Flash and SLC NAND Flash products in mainland China in 2024, and is expected to be the second largest in niche DRAM market share [1] - According to Everbright Securities, Zhaoyi Innovation is a leading player in the domestic niche storage market, benefiting from the upward cycle in storage, which is expected to enhance both volume and price [1] - The company's diversified product portfolio is anticipated to further open up incremental growth opportunities [1]