China’s Kaifa Hits All-Time High on $217M Expansion of Chip Packaging & Testing

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Shares of a leading Chinese technology company reached a new intraday high today following an announcement of a significant investment to expand its high-end storage chip packaging and testing capabilities aimed at strategic clients. The company revealed plans to allocate approximately CNY1.5 billion (about USD217 million) toward boosting production at its facilities in Shenzhen and Hefei.

The company’s stock closed up by 2.9 percent at CNY43.98 (roughly USD6.48) in Shenzhen, after peaking at a record CNY47.03 earlier in the day. Since April’s start, the stock has surged 71 percent, with multiple records set in recent weeks.

The expansion focuses on enhancing advanced storage chip packaging and testing at the Shenzhen and Hefei sites. The Shenzhen plant will increase its capacity by five million units for packaging and eight million units for testing each month, while the Hefei facility will add almost 29 million units of monthly packaging capacity. The payback periods for these projects are estimated to be approximately 8.8 years and 8.6 years, respectively.

Construction in Shenzhen is scheduled for completion by June next year, and the Hefei expansion is expected to be operational by the end of the same year. This marks the company’s second capacity expansion within six months — a move driven by rising demand for packaging and testing services in the high-end semiconductor sector. The company anticipates that these enhancements will strengthen customer loyalty, improve margins, reinforce its competitive edge, grow market share, and create significant synergies with existing operations.

In November, the company previously invested around CNY740 million (USD109 million) to increase its monthly testing capacity at the Shenzhen facility by 5 million universal flash storage chips and 4.3 million DDR chips. Additionally, its Hefei plant saw a boost of 17.8 million units for high-end storage chip packaging.

The ongoing capacity expansions are partly driven by burgeoning supply shortages in storage chips, fueled by the rapid growth of artificial intelligence infrastructure projects across the technology industry.

Another major industry player announced a CNY3 billion investment last week to expand its Nanjing manufacturing base, aiming to add capacity for approximately 430 million memory chips annually.