On August 24, Shenzhen-based Biwin Storage Technology Co.,Ltd. released its semi-annual report for 2026. During the first half of the year, the company experienced substantial growth, posting operating revenue of 15.575 billion yuan, a year-on-year increase of 298.10%. Net profit attributable to shareholders reached 7.166 billion yuan, a sharp contrast to the loss of 226 million yuan recorded in the same period last year.

The performance surge is attributed to two key drivers: an improving storage industry cycle and rising demand fueled by AI applications. The company noted that with growing AI computing power needs and a brighter industry outlook, its customer base has continued to optimize. Notably, revenue from AI-driven emerging edge storage products hit approximately 2.86 billion yuan in the first half of 2026, up 433.58% year-on-year and 126.98% quarter-on-quarter. The ramp-up of AI glasses and other endpoint devices has been a significant catalyst.

Profitability has also shown clear improvement. The company's gross margin for the period reached 54.81%, a substantial jump from 21.44% in 2025. In its report, the company cautioned that memory product prices are heavily influenced by supply-demand dynamics, meaning gross margins and earnings remain subject to significant cyclical fluctuations.

Meanwhile, Biwin Storage Technology Co.,Ltd. is increasing investments in upstream resources, R&D, and advanced packaging and testing. As of the end of June, inventory stood at 18.168 billion yuan, up 130.89% from the end of 2025. The company has also signed long-term supply agreements with memory manufacturers, committing to cumulative purchases of USD 3.3608 billion. Beyond expanding its storage business, the company is striving to move further up the industry chain through self-developed controllers, NAND media design, and wafer-level advanced packaging.

Revenue and Profit Surge Simultaneously, Gross Margin Climbs to 54.81%

Looking at core financial metrics, Biwin Storage Technology Co.,Ltd. saw a comprehensive leap in performance during the first half.

The company achieved operating revenue of 15.575 billion yuan, up 298.10% year-on-year. Total profit reached 8.388 billion yuan, compared to a loss of 309 million yuan in the prior-year period. Net profit attributable to shareholders was 7.166 billion yuan, versus a loss of 226 million yuan previously. Deducting non-recurring items, net profit stood at 6.633 billion yuan, against a loss of 232 million yuan a year earlier. Basic earnings per share came in at 15.28 yuan, with a weighted average return on equity of 78.69%.

Of particular note is the significant improvement in profitability. According to company disclosures, gross margins from 2023 through the first half of 2026 were 1.71%, 18.19%, 21.44%, and 54.81%, respectively. Against the backdrop of an upward storage industry cycle and an optimized product mix, both revenue scale and profit margins have risen in tandem.

However, profits do include certain non-recurring gains. Non-recurring items totaled 533 million yuan in the first half, including approximately 677 million yuan in fair value gains from financial assets. Meanwhile, share-based payment expenses amounted to 90.6374 million yuan. Excluding these share-based payments, net profit attributable to shareholders would have been 7.256 billion yuan.

AI Edge Storage Accelerates Ramp-Up

On the business front, AI-driven emerging edge devices have become one of the company's fastest-growing segments.

The company disclosed that revenue from AI emerging edge storage products reached approximately 2.86 billion yuan in the first half of 2026, up 433.58% year-on-year and 126.98% sequentially. With the accelerating adoption of AI glasses and other endpoint devices, collaboration with key customers like Meta has deepened, driving demand for related storage products.

By business category, smart mobile and AI emerging edge segments generated revenue of 6.244 billion yuan in the first half. PC and enterprise storage contributed 2.947 billion yuan, smart automotive and other applications brought in 6.233 billion yuan, and advanced packaging and testing services added 151 million yuan. By product type, storage products generated 14.881 billion yuan, with embedded storage alone contributing 11.334 billion yuan, making it the company's primary revenue source.

The company stated that its ePOP and similar products feature low power consumption, fast response, and compact, lightweight designs. They have been integrated into AI/AR glasses and smartwatches from customers including Meta, Google, Alibaba, Xiaomi, Xiaotiancai, Rokid, and Thundercomm.

Self-Developed Controllers Progress, R&D Investment Grows

In terms of products and technology, Biwin Storage Technology Co.,Ltd. is transitioning from a pure storage solutions provider to self-developed chips and advanced packaging.

In the first half, R&D expenses reached 344 million yuan, up 26.01% year-on-year. As of the end of June, the R&D team comprised 1,685 people, representing 44.91% of total employees. The company said its self-developed eMMC controller chip SP1800 has achieved mass production and shipment across smart wearables, smartphones, smart automotive, and industrial control sectors.

On the UFS controller front, the company's first UFS 3.1 controller, SP9300, was taped out in February 2026 and has completed return-chip validation. It is scheduled to begin customer qualification in the second half of this year. Additionally, the company has started developing small-capacity NAND Flash media designs and is collaborating with leading domestic foundries on SLC and MLC NAND products at 24nm and 19nm nodes.

This indicates that the company is working to build out its full industry chain capabilities, from storage media and controller chips to packaging and testing, in order to enhance its self-developed and customized storage product offerings.

Expanding Wafer-Level Advanced Packaging, Targeting "Storage, Computing, and Transport"

Advanced packaging and testing is another key focus for Biwin Storage Technology Co.,Ltd.

Through Guangdong Xincheng Hanqi, the company is building wafer-level advanced packaging and testing capabilities, developing three product lines around the "storage, computing, and transport" infrastructure for AI hardware: FOMS for advanced memory chips, CMC for storage-computing integration, and OEC for high-speed signal transmission. The company has already launched the FOMS-R ultra-thin LPDDR product, completed 10-chip Chiplet integrated packaging process samples for CMC, and is collaborating with customers on 6.4T NPO optical engine packaging for OEC.

Capacity expansion is also underway. The wafer-level advanced packaging manufacturing project has a total investment of approximately 3.09 billion yuan. As of the first half, cumulative actual investment reached 1.521 billion yuan, with 186 million yuan invested during the reporting period. The project remains under construction. The company plans to achieve monthly capacity of 5,000 wafers by the end of 2026 and 10,000 wafers per month by the end of 2027. It expects to begin contributing revenue by the end of 2026, assuming smooth customer qualification.

Aggressive Stockpiling Weighs on Operating Cash Flow

The flip side of rapid growth is a notable increase in working capital tied up.

As of the end of June, inventory balances reached 18.168 billion yuan, up 130.89% from the end of 2025. The company said this was primarily strategic stockpiling to secure future business growth and lock in core storage raw materials through long-term supply agreements. It has signed two long-term raw material procurement agreements with memory manufacturers, with cumulative committed purchases of USD 3.3608 billion, including USD 1.8608 billion for enterprise-grade NAND flash.

Meanwhile, operating cash flow remains negative. Net cash flow from operating activities was -6.261 billion yuan in the first half, a further decline year-on-year, which the company attributed mainly to increased procurement expenditures.

Therefore, while storage prices and demand remain robust, large-scale stockpiling helps secure supply and fulfill orders. However, if storage prices or demand shift significantly in the future, high inventory levels could also create pressure on capital allocation and potential inventory write-downs.