大中华区半导体-存储或能存续更久-Greater China Semiconductor-Old Memory Could Last for a Longer Time

Summary of Conference Call Notes Industry Overview - Industry: Greater China Semiconductor, specifically focusing on memory products such as DRAM and NAND flash - Key Trends: Stronger pricing for mainstream memory products, particularly DDR4 and DDR3, with indications of sustainability for legacy NAND and NOR flash into 2026 [1][2][3] Core Insights - Mainstream Memory Upcycle: Analysts believe it is not too late to invest in the memory upcycle, with Micron being upgraded to Overweight due to the cessation of pricing quotes for enterprise customers, indicating potential pricing upside [2][10] - Pricing Dynamics: - DDR4: Expected to see a 10-15% undersupply over the next three quarters, with contract prices potentially doubling in Q4 2025. Pricing quotes are becoming valid for less than one month, suggesting rapid adjustments [3][10] - DDR3: Anticipated to experience high double-digit growth in pricing as it catches up with DDR4 [3] - NOR Flash: A 5-10% price increase is expected in Q4, driven by demand from IoT devices like AirPods, which could account for 5-10% of global NOR demand by 2026 [4] Company-Specific Insights - Winbond Electronics Corp: - Price target raised from NT$42 to NT$50, reflecting a bullish outlook on DDR4 production starting in Q1 2026 and a 23% increase in earnings estimates for 2026 and 2027 [5][24] - Earnings estimates for 2025-2027 revised upwards, with a notable narrowing of EPS loss for 2025 and increases for 2026 and 2027 [19][48] - Winbond's stock is expected to trade at a P/B multiple of 2.0x 2026e BVPS, indicating strong confidence in pricing sustainability and growth potential [24][28] - Other Companies: - GigaDevice: Price target increased from Rmb234 to Rmb255, benefiting from DDR4 and NOR pricing dynamics [7] - AP Memory: Price target raised from NT$415 to NT$435, with potential benefits from DDR3 price hikes [7] - PSMC: Price target increased from NT$22 to NT$30, with a focus on the strong DDR3 market [7] Additional Considerations - Market Dynamics: The industry is witnessing a shift in market share from Mainland China to Taiwanese players, particularly in the NOR segment [33] - Long-term Potential: Engagement with multiple foundry partners and customers is expected to drive long-term growth, particularly through innovations like CUBE [34] - Risks: Potential headwinds for the logic business and the overall volatility in memory pricing could impact future performance [34][43] Financial Metrics - Winbond Financials: - 2025 estimated net sales: NT$91.654 billion, with a projected increase to NT$113.029 billion in 2026 [44] - EPS estimates for 2025 revised to NT$0.22, with further increases expected in subsequent years [19][20] - Gross margin expected to improve from 26.8% in 2025 to 34.3% in 2026 [46] This summary encapsulates the key points from the conference call, highlighting the positive outlook for the semiconductor memory industry, particularly for companies like Winbond, amidst evolving market dynamics and pricing trends.