大中华区半导体-旧存储，强关联Greater China Semiconductors-Old Memory, Close Connection

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]