HK Stock Market Move | GigaDevice Semiconductor Inc. (03986) plunges over 12% amid market concerns over AI capital expenditure peaking. The company recently warned of industry risks.

GigaDevice Semiconductor Inc. (03986) plummeted more than 12%, dropping 11.53% to 1051 Hong Kong dollars, with a turnover of 272 million Hong Kong dollars as of the time of writing. On the news front, it was reported that Meta is planning to launch a cloud infrastructure business, selling AI computing power and model access rights to external customers. This news was interpreted by the market as a sign that capital expenditures by large tech companies on AI infrastructure investments have peaked. Investors are concerned that high-performance storage chips and computing chips, currently facing supply bottlenecks, will soon be in oversupply. GigaDevice Semiconductor Inc. stated in an announcement that with mainstream storage manufacturers re-entering the niche storage market, niche storage products may face the risk of price declines in the future. Morgan Stanley believes that what GigaDevice Semiconductor Inc. is warning of are industry risks that may occur in the next few years, rather than things that are currently happening. The industry supply and demand are still tight, the upward trend in prices has not been disrupted, so they continue to maintain their hold rating for relevant companies.