(Yicai Global) Dec. 12 -- Jiangsu Dagang's shares gained by the exchange-imposed daily maximum after the firm said its integrated circuit unit will spend CNY130 million (USD18.5 million) to boost capacity of its eight-inch contact image sensor wafer chip packaging to meet surging demand.

Jiangsu Dagang [SHE:002077] jumped 10 percent today to CNY6.09 (9 US cents) a share. The Jiangsu province-based firm's stock price has gained 60 percent this year, outpacing a 36 percent increase in the benchmark Shenzhen Component Index.

Based on current monthly output of 12,000 units, Suzhou Keyang Optoelectronics Technology will self finance the capacity expansion by installing new equipment, its parent company said in a statement yesterday. With a CNY70 million investment, the first of two expansion phases is due to finish in the first quarter of next year, adding 3,000 units to monthly output.

The CIS chip, a core component of a wide range of cameras, is needed for new technologies, including facial and iris recognition. Due to soaring demand, CIS chip prices have climbed sharply and some products are out of stock.

Jiangsu Dagang, whose main business is real estate development, entered the integrated circuit business in March by acquiring a near 66 percent stake in Suzhou-based Keyang Optoelectronics for CNY180 million.

The CNY60 million second phase, which will mostly expand packing capacity for two kinds of chips, CIS and filters, will go ahead depending on market conditions, according to the statement, which did not mention the projected additional output.