Shares of GIGADEVICE (ASX: 03986) experienced a sharp decline of more than 12%. At the time of writing, the stock was down 11.53% to HK$105.1, with a turnover of HK$272 million.

Reports indicate that Meta is formulating plans to launch a cloud infrastructure business, aiming to sell AI computing power and model access to external clients. The market has interpreted this development as a sign that capital expenditure on AI infrastructure by major tech companies may have reached its peak. This has raised investor concerns that high-performance memory and computing chips, currently facing supply bottlenecks, could soon encounter a situation of oversupply.

GIGADEVICE issued an announcement noting that as major memory manufacturers re-enter the niche memory market, niche memory products could face the risk of price declines in the future. Analysts at Morgan Stanley have commented that the warning from GIGADEVICE pertains to potential industry risks in the coming years, rather than an immediate issue. They believe the industry's supply and demand remain relatively tight, and the upward price trend has not been disrupted, leading them to maintain their overweight rating on related companies.