Value Investing: Latest Industry Research Report – Nanya Technology (2408-TW) Benefits from Tightening Supply of Legacy Memory, Driving Profits via Price and Capacity Growth

The stock has been performing exceptionally well recently. Investors are curious whether Mr. Qinglong has re-entered positions—tune in to the program for updates. Regardless, the memory sector remains a compelling area for industry research.

Nanya Technology (2408-TW) reported another record-breaking monthly revenue in July, with rising memory prices now clearly reflected in its financial figures. International memory giants are shifting wafer production capacity toward high-bandwidth memory (HBM) and fifth-generation double data rate (DDR5) memory, leading to a continuous contraction in fourth-generation (DDR4) product supply. Meanwhile, demand from servers, consumer electronics, and industrial equipment continues to grow, making Nanya a primary beneficiary of this supply-demand shift.

July’s consolidated revenue reached NT$43.868 billion, up 49.27% month-on-month and 719.61% year-on-year. Cumulative revenue for the first seven months hit NT$175.504 billion, a 660.87% increase from the same period last year—both single-month and year-to-date figures marking new company highs. Capacity utilization is nearing full load, leaving limited room for short-term shipment growth. The main driver behind revenue expansion is therefore higher average selling prices (ASPs) and an increased share of high-margin products.

Supply of fourth-generation DDR memory is rapidly tightening. Global memory makers are reallocating wafer capacity to DDR5 and HBM, with little appetite to expand legacy production lines. Demand, however, is expanding beyond servers into PCs, networking, consumer electronics, and industrial applications. With fewer supply sources and broader demand, third-quarter price increases are stronger than initially expected.

Institutional estimates suggest DDR4 prices could rise by up to 50% in Q3, with double-digit gains still possible in Q4. Some customers have not signed long-term fixed-price supply contracts, allowing suppliers to adjust pricing more quickly based on market dynamics. Nanya’s current capacity is heavily focused on these niche and legacy products, meaning each price hike delivers a direct and amplified impact on revenue and gross profit.

The company posted second-quarter revenue of NT$82.549 billion, a 68.2% sequential increase. Average memory selling prices rose over 60% quarter-on-quarter, gross margin climbed to 79.5%, and earnings per share (EPS) reached NT$14.66. Full first-half EPS totaled NT$23.38. The profitability leverage from price hikes was already evident in Q2, and July’s revenue surged nearly 50% from June, indicating a clear upward momentum heading into Q3.

Product mix is also improving. Revenue from AI infrastructure and server-related products accounted for over 20% in the first half. The company continues to supply DDR5, low-power DDR5, DDR4, and low-power DDR4 memory. While AI servers drive demand for advanced memory and squeeze capacity for older generations, Nanya is uniquely positioned to serve both server demand and mature specifications being phased out by international giants.

New factory plans will determine future output ceilings. The company aims to reach 30,000 wafers per month in Phase 1 by 2028, with full capacity at 45,000 wafers. Total capital expenditure is estimated at NT$480 billion. R&D on 10nm-class processes from Gen3 to Gen5, along with EUV technology, is progressing as planned. Existing capacity benefits from rising prices, while the new fab ensures Nanya (2408-TW) maintains supply expansion capability beyond 2027.

This memory cycle has transitioned from inventory correction to supply shortage. Record July revenue, near-full capacity, and continued Q3 price hikes for DDR4 all signal ongoing profit expansion. Going forward, watch Q4 contract pricing, server product mix, and new factory progress. Sustained high prices and further product mix improvements could keep Nanya (2408-TW) on an upward trajectory. To be among the first to know which stocks to buy on dips, join Mr. Qinglong’s official LINE: search @ai8085 or click the link below. Free intraday CALL alerts are delivered daily, highlighting strong-performing stocks to monitor.

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Source: Analyst Tsai Ching-Long – Moore Investment Advisory

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