(Yicai) March 25 -- Biwin Storage Technology's shares surged after the leading Chinese storage module supplier said it has signed a deal to purchase storage wafers worth USD1.5 billion to reduce the impact of price fluctuations on its production costs.

Biwin [SHA: 688525] closed 9.4 percent higher at CNY253.35 (USD36.76) a share today, after earlier surging by as much as 12.9 percent. The broader Shanghai stock market rose 1.3 percent.

Biwin will buy the storage wafers at fixed prices over the next two years, starting at the beginning of next quarter, the Shenzhen-based company announced late yesterday. The products will be evenly distributed over eight quarters, with the amount received per year equivalent to about 11 percent of the NAND Flash wafer it purchased last year, it said.

The agreement will help enhance the stability of the mid-to-long-term supply of storage wafers, Biwin pointed out, without disclosing the name of the supplier for confidentiality reasons.

Major overseas suppliers of NAND Flash wafers include Samsung Group, SK Hynix, Kioxia, Micron Technology, and Western Digital.

Biwin is an independent semiconductor storage solutions provider focusing on the research, design, packaging, and testing of semiconductor memory.

Its net profit soared 429 percent to CNY853 million (USD120 million) in the 12 months ended Dec. 31 from the previous year, while revenue jumped 69 percent to CNY11.3 billion (USD1.6 billion), thanks to growing demand from artificial intelligence applications, according to its annual financial report.

Editor: Martin Kadiev