[DigitalToday reporter Jinju Hong] Chinese memory module maker Longsys forecasts its net profit for the first half of this year will surge by as much as 744 times. With the spread of artificial intelligence reviving demand for memory and supply growth limited, Chinese memory companies are seen as benefiting from the industry recovery.

Longsys expects first-half 2026 net profit attributable to shareholders of 9.2 billion to 11.0 billion yuan ($1.28 billion to $1.53 billion), the Hong Kong-based South China Morning Post reported on Sunday. Net profit in the year-earlier period was 14.8 million yuan ($2.06 million), implying an increase of about 622 times to as much as 744 times.

Revenue is also expected to rise sharply. The company forecast first-half revenue would increase to 22.0 billion to 25.0 billion yuan ($3.06 billion to $3.48 billion) from 10.2 billion yuan ($1.42 billion) a year earlier. The recovery in the global memory market is seen as translating into better results for Chinese storage companies.

Longsys cited a recovery in memory demand and limited supply expansion as drivers of the earnings surge. It said demand rose on increased investment in AI servers and data centres and a recovery in the PC and smartphone markets, while global memory wafer capacity expansion remained limited, improving the pricing environment.

Supply chain stabilisation also helped improve results. Longsys said it re-signed long-term supply contracts and memorandums of understanding with major global memory wafer suppliers, laying the groundwork for securing stable raw materials. The company said this allowed it to strengthen its supply chain for future growth.

The forecast also aligns with a broader recovery in China's memory industry. As AI demand tightens supply in the DRAM and NAND flash markets, memory prices have rebounded, and not only makers such as ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co (YMTC) but also downstream companies producing SSDs and memory modules are benefiting, it said.

Longsys is also continuing aggressive investment. Chinese regulators recently approved the company's private placement, and it plans to raise up to 3.7 billion yuan ($514.8 million). It plans to spend the funds on developing high-performance memory products for AI, storage controller chips, advanced packaging technology and strengthening testing capabilities.

The company also resumed efforts to list on the Hong Kong Stock Exchange in May and moved to raise additional funds. It aims to bolster the competitiveness of its storage business based on profitability secured from the industry recovery and funding for new investment.

Market participants are focusing on Chinese memory companies accelerating capacity expansion and technology investment as memory demand grows in the AI era. If the rebound in memory prices continues, there are suggestions that performance improvements at Chinese storage companies could continue for the time being.