November 20, 2025 08:00 PM GMT Greater China Semiconductors | Asia Pacific Old Memory: Investor feedback We address key investor questions amid the recent correction in old memory stock prices. We remain bullish on old memory and reiterate Winbond as our Top Pick. We are seeing a correction in the stock prices of old memory players. However, we continue to expect a structural DDR4 supply shortage and significant pricing upside, along with a widening undersupply gap in MLC NAND and NOR (link). We address key ...

Old Memory: AI Driving Sustained Demand Besides datacenter switches, eSSD and some HDDs also require DDR4 for cache memory. The recent sell-off offers an attractive entry point into the established memory supercycle. Key Takeaways November 17, 2025 04:41 PM GMT Greater China Semiconductors | Asia Pacific Don't forget DDR4 is also in AI servers: Our AP tech analyst Shawn Kim expects strong DDR5 pricing hikes for datacenters (link). Previously we highlighted that we believe the market is underestimating the i ...

Summary of Conference Call on Greater China Semiconductors Industry Overview - The focus is on the semiconductor industry, particularly memory products such as DDR4 and NAND - Demand for networking is expected to extend the lifespan of DDR4, leading to further increases in average selling prices (ASP) across vendors [1][2][3] Key Insights - **Data Center Demand**: Data centers are driving demand not only for mainstream memory but also for DDR4. Most networking switches, including Nvidia Spectrum and NVlink, still utilize DDR4, indicating a slower migration to DDR5 [3][4] - **DDR4 Supply and Demand Dynamics**: DRAM constitutes a low-single-digit percentage of the bill of materials (BOM) for switches, compared to approximately 30% for general servers. This suggests that vendors have little incentive to switch to DDR5 as long as DDR4 supply remains available. Even if DDR4 prices double, it would only represent about 5% of the switch BOM [4][9] - **NAND Market Potential**: There is potential upside for MLC NAND, with vendors like Macronix expected to introduce high-density MLC NAND in the next six months. The demand for legacy ROM is also anticipated to strengthen due to the launch of Nintendo Switch 2, which aligns with high digital gaming rates [5][9] Company-Specific Updates - **Winbond**: - Winbond has reported stronger-than-expected earnings, with gross margins estimated to have reached approximately 43% in September. The company is expected to benefit from the anticipated price hikes in memory during Q4 [6][9] - Price target raised from NT$50 to NT$65, reflecting a bullish outlook on the company's performance [30][34] - **Macronix**: Earnings estimates have been raised, with expectations for MLC 128Gb dies to be supported starting from Q2 2026. The company is also expected to benefit from the Nintendo Switch sales [6][9] - **Nanya Technology**: Target price lifted as it is seen as a major beneficiary of the DDR4 shortage [6][9] - **Powerchip**: Upgraded to Overweight despite being the least preferred memory stock, as it may surprise due to the strength of the DDR4/3 cycle [6][9] Financial Projections - Winbond's EPS estimates for 2025 have been revised to a loss of NT$0.01 from NT$0.22, with significant increases in EPS estimates for 2026 and 2027 [25][30] - PSMC's EPS forecasts for 2025-27 have been slightly lowered due to depreciation impacts and lukewarm demand from logic [59][60] Market Sentiment - The overall sentiment remains bullish, with price targets raised across various vendors, indicating confidence in the memory market's recovery and growth potential [6][9][30] Additional Considerations - The market is currently underestimating the importance of DDR4 in enterprise and data center switches, which could impact future supply and demand dynamics [9] - The ongoing transition from DDR4 to DDR5 is not a primary focus for switch vendors, which may prolong the relevance of DDR4 in the market [3][4]

Group 1 - Sichuan provincial and municipal funds are actively investing in key industrial projects, including rocket transportation, integrated circuits, and biomedicine [1] - Sichuan Manufacturing Collaborative Development Fund has strategically invested in Chengdu Ridiwei Technology Co., Ltd., a key player in millimeter-wave SoC chips and active phased array microsystems [4] - The investment aims to accelerate the mass production and iterative upgrade of Ridiwei's core products, enhancing the resilience and security of Sichuan's electronic information industry chain [4] Group 2 - Beijing Xinghe Power Aerospace Technology Co., Ltd. completed a D-round financing of 2.4 billion yuan, marking the second-highest single financing amount in China's commercial aerospace sector [6] - The funds will be used to accelerate the development of the "Zhishenxing" reusable liquid rocket and "Gushenxing No. 2" medium solid rocket [6] - Xinghe Power's financing reflects a trend of increased funding for private rocket companies in China, with Sichuan state-owned assets actively participating [7] Group 3 - Chengdu Science and Technology Investment Group led an investment in Zhixun Innovation Technology Co., Ltd., focusing on the mass production of MLC NAND and future new products [9] - The investment will support the establishment of a second headquarters and a storage chip R&D and manufacturing base in Chengdu [9] - Chengdu Nuyret Medical Technology Co., Ltd. completed a D-round financing of approximately 800 million yuan, indicating strong market confidence in its development prospects [9]

Core Viewpoint - The semiconductor industry is experiencing a significant rebound, driven by supply shortages and price increases, particularly in DDR4 memory chips, alongside technological advancements in optical computing [1][2][3]. Group 1: Market Performance - The semiconductor sector has shown strong performance, with notable stocks like Shengyi Electronics, Kexiang Co., and Zhongfu Circuit rising over 10%, and several stocks hitting the daily limit [1][2]. - The semiconductor ETF saw a rise of over 1%, indicating a positive market sentiment and a potential shift in investor focus towards this sector [2]. Group 2: Supply-Side Dynamics - Trend Force reported a 53% month-on-month increase in DDR4 prices in May, marking the largest increase since 2017, with prices continuing to surge into June [2][3]. - Major DRAM manufacturers, including Samsung, SK Hynix, and Micron, have announced production halts for DDR4, leading to a supply crunch and increased prices for existing stock [3]. - The market is expected to see a reduction in DDR4 production starting in Q1 2024, which may benefit domestic companies through price increases and order transfers [4]. Group 3: Technological Advancements - A breakthrough in optical computing was reported by the Shanghai Institute of Optics and Fine Mechanics, with the development of the "Meteor One" chip, which addresses high-density information processing challenges [3]. - This advancement is anticipated to enhance the performance of optical computing systems, paving the way for low-power, high-speed computing solutions [3]. Group 4: Demand-Side Trends - The consumer electronics sector is witnessing a recovery, with specific growth in AI and automotive applications driving demand for semiconductors [5]. - Global smartphone shipments are projected to grow by 1.5% year-on-year in Q1 2025, while PC shipments are expected to increase by 4.9% in the same period [6][7]. - The wearable technology market is experiencing significant growth, with AI glasses expected to see a 216% increase in shipments year-on-year in Q1 2025 [8].

Group 1 - Samsung plans to exit the Multi-Level Cell (MLC) NAND business and will only accept chip orders until next month [1] - Samsung has informed a customer about increasing MLC NAND prices, prompting the customer to seek alternative suppliers [1] - LG Display is also looking for another MLC NAND supplier to replace Samsung, as it has been using Samsung's MLC NAND in its 4GB eMMC for large OLED panels [1] Group 2 - The production halt of MLC NAND may lead Samsung to focus its resources on Triple-Level Cell (TLC) and Quad-Level Cell (QLC) NAND technologies [1] - TLC currently dominates the global NAND market, accounting for 62% of global NAND sales according to Mordor Intelligence [2]