(Yicai) Sept. 10 -- Shares in Kaifa Technology soared as much as 5.3 percent today, bucking a broadly weaker market, after the leading Chinese DRAM memory packaging and testing firm said it plans to invest CNY1.8 billion (USD273 million) to expand its high-end memory chip packaging and testing capabilities as well as advanced packaging R&D capacity to capitalize on the rapid growth of the artificial intelligence industry.

Kaifa’s share price [SHE: 000021] closed up 4.3 percent at CNY36.50 (USD5.50). Earlier in the day, it hit CNY36.85. The gain came as major domestic stock indexes remained under pressure. The Shenzhen Component Index, the benchmark index for the Shenzhen Stock Exchange, ended the day 0.7 percent lower.

Kaifa's wholly-owned subsidiary Shenzhen Payton Technology plans to spend CNY1.2 billion (USD180 million) to build a production line for memory chip packaging and testing services, Shenzhen-based Kaifa said last night.

Once up and running, the facility will be able to handle 90,000 wafers per month for conventional packaging and testing, along with 10,000 wafers per month for 2.5D advanced packaging, it added.

Shenzhen Payton Technology also intends to pour CNY630 million (USD93 million) into constructing R&D production lines for 2.5D and 3DS advanced packaging. Once completed, the two R&D production lines will each have a monthly capacity of 100 wafers.

2.5D packaging is the mainstream advanced packaging solution for AI servers. A typical application involves integrating High Bandwidth Memory with AI computing chips within the same package. 3DS is a vertical chip-stacking process, used to stack DRAM dies inside HBM products.

Both projects are scheduled to be completed and enter production in December 2028.

The estimated pre-tax payback period for the conventional production line is just over 12 years. For the R&D production lines, the investment benefits are likely to be mainly reflected in enhanced technological capabilities and stronger core R&D competitiveness, Kaifa said.

The investment will help consolidate the firm’s market position and market share in semiconductor packaging and testing, enable it to respond more effectively to client demand, accelerate its development of advanced packaging technologies and overcome existing capacity constraints, it added.

In a separate announcement released last night, Kaifa said its Chairman Han Zongyuan had retired and stepped down from the post that day. Zhou Gengshen, the company’s vice president, has been elected to succeed him. 59-year-old Zhou also currently serves as chairman of Kaifa’s two major manufacturing bases in Shenzhen and Hefei.

Editor: Kim Taylor