In the first half of 2026, AI computing demand triggered a surge in memory chip prices, with storage chip makers delivering explosive profit growth while automakers including SERES, GAC, and JAC issued profit warnings due to rising costs, fundamentally reshaping the auto supply chain profit landscape.
Data Highlights: Unprecedented Profit Polarization
In July 2026, China's automotive industry chain is displaying unprecedented profit polarization:
- Shenzhen Longsys Electronics saw first-half net profit surge more than 740-fold
- GigaDevice quarterly earnings topped three times its total for the previous year
- SERES, GAC, and JAC have all issued profit warnings
SERES didn't mince words in its performance report, citing "a sharp rise in memory chip prices pushing up production costs" as a primary driver of its losses.
Root Cause: AI Computing Thirst Ignites Memory Chip Super Cycle
The root cause of this surge is a "thirst for computing power" triggered by artificial intelligence. A top-tier AI training server packs over 100GB of high-bandwidth memory (HBM) — dozens of times the DRAM used in a standard server.
As CCTV Business has reported, Samsung, SK Hynix, and Micron have shifted 70% to 80% of their advanced process capacity to HBM and premium server DDR5 memory to meet explosive demand. General-purpose DRAM and NAND capacity has been systematically squeezed, and this supply-demand mismatch ignited the price spike.
| Product Type | Demand Driver | Capacity Change | Price Impact |
|---|---|---|---|
| HBM Memory | AI Training Servers | Capacity doubled | Significant price increase |
| Server DDR5 | Data Center Expansion | Capacity concentrated | Supply tightness |
| General DRAM | Automotive, Consumer Electronics | Capacity squeezed | Price pass-through |
| Automotive DRAM | Smart Vehicle Demand | Only ~3% of global | Procurement difficulties |
Automotive Industry: Chip Buyers Pushed to the Back
In this capacity battle, the automotive industry — claiming only about 3% of the global DRAM market — has been pushed to the back of the line. AI server orders swallow up every bit of advanced capacity like a black hole, and automotive buyers are struggling to secure supply.
| Company | Type | Profit Performance | Core Reason |
|---|---|---|---|
| Longsys | Memory Chips | Net profit up 740x+ | AI demand driving price surge |
| GigaDevice | Memory Chips | Quarterly exceeds full-year 3x | Capacity shift + strong demand |
| SERES | Vehicle Manufacturing | Issued profit warning | Significant chip cost increases |
| GAC | Vehicle Manufacturing | Issued profit warning | Supply chain cost pressure |
| JAC | Vehicle Manufacturing | Issued profit warning | Raw material price increases |
Impact and Implications: Supply Chain Restructuring Accelerates
This profit polarization sends three critical signals:
- AI and automotive are competing for the same supply chain resources: Advanced process capacity is limited, with AI and intelligent driving demands exploding simultaneously, intensifying competition
- Chip autonomy and control become even more critical: Overseas capacity is tilting toward AI, and the automotive industry needs more stable chip supply assurance
- Automakers need more flexible supply chain management: From single-source procurement to diversified layouts, from spot trading to long-term agreements
The dramatic polarization of "chip profits surging while automakers bleed" in 2026 marks the automotive supply chain entering a new competitive phase. Computing power not only determines the intelligence level of vehicles but is also beginning to directly affect automakers' cost structures and profitability.
