大中华半导体 - 旧存储投资者反馈-Greater China Semiconductors-Old Memory Investor feedback

Summary of Conference Call on Greater China Semiconductors Industry Overview - The focus is on the old memory segment within the semiconductor industry in Greater China, particularly regarding DDR4 and NAND memory products [1][2]. Key Points and Arguments Market Correction and Outlook - There has been a correction in stock prices of old memory players, but the outlook remains bullish on old memory, with Winbond identified as a Top Pick [1][2]. - A structural DDR4 supply shortage is anticipated, alongside significant pricing upside due to a widening undersupply gap in MLC NAND and NOR [2]. Capacity Expansion - There is no major DDR4 capacity expansion expected from the big three vendors or CXMT, as they are focusing on HBM4/HBM3e and DDR5 to pursue a larger Total Addressable Market (TAM) [3]. - Winbond plans to expand its DDR4 capacity from 15kwpm to 24-25kwpm by 2027, but this will not alleviate the supply shortage expected in 2026, where Winbond is projected to account for only ~12% of total capacity supply [4]. Demand Resilience - Demand for legacy DRAM remains resilient post-price hikes due to: 1. Impracticality of shifting from DDR4 to DDR5 for certain applications. 2. Risks to system stability and compatibility with DDR5. 3. Low percentage of DRAM in the Bill of Materials (BOM) for various systems [5]. Memory Cycle and Valuation - The memory cycle typically spans 4-6 quarters, and the current cycle is only about two quarters in. The DDR4 structural supply shortage and pricing upside are unprecedented, driven by the AI megatrend [6]. - There is potential for further price hikes, with DDR4 contract pricing expected to rise multiple times from the trough, and spot prices may also see an increase due to low inventory levels [6]. Recent Price Correction - The recent correction in memory pricing is attributed to technical and positioning factors rather than fundamental changes in pricing, earnings outlook, or supply-demand dynamics. A recommendation to buy on dips is suggested [7]. Additional Insights - The valuation methodology for Winbond is based on a 3.0x 2026e P/B, reflecting the industry's high volatility and strong DRAM pricing upside [11]. - Risks to the upside include stronger-than-expected demand for NOR Flash and DRAM pricing, while risks to the downside involve potential oversupply and slower development in SLC NAND [13]. Conclusion - The semiconductor industry, particularly in the old memory segment, is poised for significant developments despite recent stock price corrections. The focus on DDR4 and the strategic moves by companies like Winbond indicate a complex but potentially lucrative landscape for investors in the coming years.