Nanya Technology Corp’s (南亞科技) chances of returning to the black next quarter are increasing due to improving supply-demand dynamics as the world’s top three memorychip makers allocate more capacity for the production of high-bandwidth memory (HBM) chips, the company said yesterday.
Such a capacity shift plays a major role in bringing down inventory and propping up DRAM chip prices, as pressure for standard DDR4 supply weakened, Nanya Technology president Lee Pei-ing (李培瑛) said on the sidelines of the company’s annual shareholders’ meeting in Taoyuan.
About 10 percent of the world’s DRAM capacity this year would be used for the production of HBM chips, which are essential to artificial intelligence (AI) applications, Lee said.
Photo: Grace Hung, Taipei Times
HBM chips offer much faster data processing speeds than standard DRAM chips, he said.
To cope with strong AI demand, DRAM chipmakers would continue to allocate more capacity, originally reserved for DDR4 chips, for the production of high-density DDR5 chips, Lee said.
That capacity shift is highly likely to accelerate next year, riding on the AI boom, he said.
“We are anticipating a further improvement in the global [DRAM] market in the second half. Prices will also improve quarter by quarter,” Lee said.
For Nanya Technology, that increases the likelihood that it would swing back to profit, Lee said.
The company has dipped into the red for the past six quarters.
In addition to improving supply-demand dynamics, the introduction of new smartphones and PCs featuring AI functions would boost demand for DRAM chips, Nanya Technology chairman Wu Chia-chau (吳嘉昭) told shareholders.
A recovery in consumer electronics, such as televisions ahead of the Paris Olympics and the new Wi-Fi 7 standard would also drive DRAM demand, Wu said.
The company expects its gross margin to return to positive territory this quarter from minus-2.9 percent in the previous quarter.
DDR4 chips account for more than 60 percent of the company’s total shipments, and Nanya Technology expects to start small-volume production of its first DDR5 chips in the second half of this year, Lee said, adding that the more advanced DDR5 chips would be used in PCs and servers.
The company aims to supply high-density DDR5 modules in the second half of next year, based on its through-silicon via technology, it said.
Regarding the HBM market, the company would not rush into this highly competitive market as it would need a long-term plan and comprehensive preparations, Lee said.
Nanya Technology did not comment on local media reports that it has formed an HBM task force to facilitate the technology’s advancement.
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