On August 31, Yandong Micro witnessed a dramatic plunge in its stock price. By the day's trading close, the share price had tumbled to RMB 49.52, marking a hefty 7.87% decline and leaving the company with a total market capitalization of roughly RMB 70.7 billion. Market analysts point out that Yandong Micro suffered substantial losses in the first half of the year, accompanied by a notable drop in product gross profit margins. Simultaneously, the capital outlay for the 12-inch production line has been considerable, and the company is bracing for significant pressure from depreciation and financial expenses down the line. Moreover, competition within the 6-inch and 8-inch mature wafer foundry market has intensified, leading to a squeeze on foundry prices.

In response, Yandong Micro clarified that its operational status remains normal, with certain projects still under construction. There has been a substantial investment in fixed assets during the initial stages, and profits are currently being significantly impacted by the ongoing capacity expansion. Although 12-inch chips represent the future trajectory of the industry, there continues to be a market demand for 6-inch and 8-inch chips. The company will determine the production of specific products based on prevailing market supply and demand conditions.