Woofun AI reports that Zhaoxin Innovation issued a stock trading risk warning, highlighting the historical cyclicality of storage chip prices which have reached record highs. The company states that the current upward trend is unsustainable and industry supply-demand dynamics will eventually rebalance.

Zhaoxin notes that niche storage products, supplied to diverse downstream sectors, have seen indirect price increases due to mainstream AI-driven supply constraints.

However, with stable downstream demand already suppressed, subsequent marginal capacity increases in the niche market are expected to cause significant price declines.

This shift poses risks to selling prices, gross profit margins, and overall profitability.

Additionally, as a fabless entity, the company faces potential upstream wafer foundry capacity tightening. Recent stock data shows cumulative closing price deviations of 73.42% over ten days and 125.60% over thirty days ending June 29, 2026.