As memory prices and demand rise, memory manufacturers Nanya Technology and Winbond have resumed normal production, no longer reducing output as they did last year. TrendForce and industry sources cited in a report from Liberty Times Net also indicate that memory shipments will continue to recover in the third quarter.

Reportedly, memory manufacturers’ utilization rates have reached 90% to 100%, surpassing the 60% to 70% utilization rates of mature process foundries.

Last year, in response to market conditions, Winbond adjusted its inventory and reduced production at its Taichung plant by up to 30-40%. This year, as market demand has rebounded, production has resumed, with capacity now at full utilization, producing 58,000 wafers per month.

Moreover, Winbond’s Kaohsiung plant has introduced new capacity equipment, increasing monthly production from 10,000 to 14,000 wafers and upgrading processes from 25nm to 20nm.

Winbond’s General Manager, Pei-Ming Chen, stated that the company is currently operating at full capacity utilization, with shipments exceeding production. This indicates a continuous decrease in inventory levels and a rise in customer demand. He then expected the second half of the year to be better than the first, with DDR3 and DDR4 contract prices increasing each quarter, aiding the company’s core profitability.

Nanya Technology Increases Production, Aims to Turn Losses into Profits in Q3

Nanya Technology adjusted production levels dynamically last year, reducing output by up to 20%. However, production has gradually increased this year.

Nanya Technology anticipates improving DRAM market conditions and prices quarter by quarter, with the industry overall trending positively and a chance to return to profitability in the third quarter.

Nanya Technology reported consolidated revenue of NTD 3.363 billion (roughly USD 103 million) for June, up 0.35% month-on-month and 36.83% year-on-year, marking the second-highest level this year. Accumulated consolidated revenue for the first half of the year was NTD 19.424 billion (roughly USD 596 million), an increase of 44.4% year-on-year.

On the other hand, chairperson Doris Hsu of GlobalWafers, a major silicon wafer manufacturer, recently stated that currently, there is stronger demand for high-performance computing (HPC) and memory applications, while demand in automotive and industrial applications is weak. Demand for mobile applications is increasing, and customers are continuing to digest inventory, leading to a more conservative approach towards procurement.

TrendForce reports that a recovery in demand for general servers—coupled with an increased production share of HBM by DRAM suppliers—has led suppliers to maintain their stance on hiking prices. As a result, the ASP of DRAM in the third quarter is expected to continue rising, with an anticipated increase of 8–13%. Among this, DDR3 & DDR4 prices expected to increase by 3–8% in Q3.

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(Photo credit: Nanya Technology)

According to a report from Commercial Times, Arthur Chiao, Chairman of Winbond, stated that this upward market cycle for the memory sector has arrived on time. Reportedly, customers are not worried about shortages, and all products made by Winbond will sell well all year round, boosting the momentum in 2025.

Looking at Winbond’s recent revenue trend, the company’s performance has risen in the second quarter, further hinting that the upward market cycle has arrived on time. Chao anticipates that this upward cycle could last for two years, making 2025 a good year throughout, with a possible downturn in 2026.

Considering Winbond’s NOR Flash, which has held the largest global market share since 2020, Chiao noted that this product is widely used in automotive, communication, telecommunications, wearable devices, and other technological applications. Overall, its sales recovery also represents a revival of the electronics market.

Regarding individual industries, as per the same report, Winbond expects the PC end market to grow by 5% to 10% in 2024. The mobile phone market, which has been in decline for three years, is also rebounding from its trough, with an estimated single-digit percentage growth. Consumer products, the first sector to undergo inventory adjustments, are also the fastest to recover. Networking and communications, driven by the growing application of Wi-Fi 7, is also optimistic in the second half of the year.

Winbond is also implementing the NCNT (Non-Taiwan, Non-China) strategy. Arthur Chiao emphasized that global trends are irreversible, and the company is starting to make early preparations in response to customer demands. Winbond’s General Manager, Pei-Ming Chen, added that the company will outsource packaging and testing to a partner factory in Malaysia and will first conduct product verification work. Although costs will rise, customers have indicated that it is acceptable.

Chiao further stated that in response to the AI trend, Winbond has adjusted its strategy and business organization. The company is transitioning from a component supplier to a service-oriented manufacturer and have established a dedicated business unit for customized memory solutions (CMS).

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(Photo credit: Winbond)

According to a report from the Korean media outlet The Chosun Daily, Chinese company Huawei plans to collaborate with memory manufacturer Wuhan Xinxin Semiconductor Manufacturing Co. (XMC) to produce High Bandwidth Memory (HBM) semiconductors. Additionally, Jiangsu Changjiang Electronics Technology (JCET) and Tongfu Microelectronics, which are developing CoWoS advanced packaging technology, are also participating in the project.

CoWoS is a high-precision technology that integrates graphics processing units (GPUs) and HBM on a single substrate. This enhances computational performance, saves space, and reduces power consumption. Currently, the CoWoS technology developed by leading foundry TSMC is used in the production of AI chips for GPU giant NVIDIA.

In May 2023, according to another report from Reuters, China’s leading DRAM company CXMT (ChangXin Memory Technologies) collaborated with Tongfu Microelectronics to develop HBM chip samples. Additionally, tech media outlet The Information reported earlier that a series of Chinese companies, led by Huawei, plan to mass-produce HBM and increase China’s HBM output by 2026.

Furthermore, in March 2023, XMC announced the construction of an advanced HBM manufacturing plant, which is expected to produce 3,000 12-inch wafers per month.

The report further emphasizes that China is still in the early stages of HBM development. However, under the technological restrictions imposed by the United States in the semiconductor and artificial intelligence sectors, Huawei and a series of Chinese semiconductor companies’ move into HBM production has attracted close attention.

Currently, South Korean companies SK Hynix and Samsung Electronics control most of the global HBM market share, indicating that Huawei’s plan to develop HBM still has a long way to go.

Per TrendForce’s data, the three major HBM manufacturers held market shares are as follows: In 2023, SK Hynix and Samsung each held around 47.5%, while Micron’s share was roughly 5%. Still, forecasts indicate that SK Hynix’s market share in 2024 will increase to 52.5%, while Samsung’s will decrease to 42.4%.

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(Photo credit: XMC)

According to a Reuters report on June 26th citing sources, with semiconductor market conditions rebounding and financial performance rapidly improving, NAND flash leader Kioxia is reportedly gearing up to file a preliminary application soon and aims to debut on the Tokyo Stock Exchange (TSE) through an initial public offering (IPO) by late October.

As per the same report citing sources, Kioxia plans to formally submit its IPO application by the end of August, aiming for a listing by late October. In order to meet the deadline, preparations are proceeding at a faster pace than usual for an IPO, although the timing may be subject to progress and could potentially be delayed until December. The sources further indicated that Bain Capital, a major shareholder of Kioxia, plans to sell part of its stake through the IPO to raise funds.

Kioxia previously obtained approval for listing on the Tokyo Stock Exchange in 2020 but postponed its IPO plans due to the US-China trade tensions and adverse market conditions. The source cited in the report mentioned that the funds raised through this IPO might be lower than its initial valuation in 2020.

Toshiba spun off its semiconductor business, which focused on NAND flash, in April 2017. The company is previously named “Toshiba Memory,” which was later renamed to “Kioxia” on October 1, 2019. Toshiba currently holds approximately 40% of Kioxia’s shares.

Previously on May 15th, the improved market environment is also reflected in Kioxia’s financial report for January to March 2024, where the company achieved a net profit of JPY 10.3 billion, ending six consecutive quarters of losses.

This turnaround was driven by improved pricing due to production cuts across various NAND Flash manufacturers, which balanced supply and demand. The consolidated operating profit improved from a loss of JPY 171.4 billion in the same period last year to a profit of JPY 43.9 billion, marking the first quarterly profit in six quarters. Notably, the demand for smartphone and personal computer chips has bottomed out and is starting to recover, while orders related to data centers have increased.

Looking ahead to market trends and future prospects, Kioxia pointed out the normalization of customer inventory levels, which is expected to drive recovery in demand for PC and smartphone applications. They anticipate future growth driven by the introduction of On-Device AI, increasing memory capacities, and potential upgrades in PC operating systems stimulating replacement demand.

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(Photo credit: Kioxia)

According to a report from South Korean media Maeil Business Newspaper, Samsung Electronics plans to raise prices for server DRAM and enterprise NAND flash by 15% to 20% in the third quarter due to surging demand for artificial intelligence (AI). This move is expected to improve the company’s performance in the second half of the year, while boosting momentum for some Taiwanese companies like Nanya Technology, ADATA, TeamGroup and Transcend in the coming quarters.

Industry sources cited by a report from Economic Daily News believe that with manufacturers defending prices, there is strong support for the market. Additionally, as the three major manufacturers focus on developing high-bandwidth memory (HBM), which limits the output of DDR4 and DDR3, it helps maintain a healthy state for the DRAM industry.

Per Maeil Business Newspaper, sources have revealed on June 26th that Samsung Electronics has recently notified major customers about the planned price increase. The Device Solutions (DS) division, responsible for Samsung’s semiconductor business, held a global strategy meeting at its Hwaseong plant in Gyeonggi-do on the same day, where this matter was discussed.

The report further stated that Samsung Electronics had already increased the prices of NAND flash supplied to enterprises by at least 20% in the second quarter, anticipating that the AI boom will drive higher server demand in the second half of the year.

According to data from DRAMeXchange, the global sales of enterprise NAND flash reached $3.758 billion in the first quarter of this year, marking a 62.9% increase from the previous quarter. With the rising demand, some products are experiencing shortages.

TrendForce also notes that with a slight improvement in server demand, Samsung has indicated it will adopt a more aggressive pricing strategy for server DRAM and enterprise SSDs for 3Q24 deals. TrendForce’s price projections posit that server DRAM prices are expected to increase by more than 10% QoQ, with enterprise SSDs enjoying a similar price range. However, due to sluggish smartphone demand, price increases in mobile categories are expected to be more modest.

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(Photo credit: Samsung)