Nanya Technology Corp (南亞科技) yesterday said the DRAM price uptrend is expected to continue as artificial intelligence (AI) boom continues to drive chip demand and leave global chip crunch unresolved for at least next year, even though prices tumbled in the spot market.
The price movements in the spot market “did not have any adverse impact on the overall market,” Nanya Technology president Lee Pei-ing (李培瑛) said, adding that the spot market accounts for a small portion of the global trading and it needs correction amid signs of speculation.
“The market demand is stable and can extend for a long period of time as we can see,” Lee said. “We are seeing a significant increase in the number of customers seeking to sign long-term supply agreements with Nanya Technology.”
Photo: Grace Hung, Taipei Times
The company still cannot 100 percent satisfy market demand this year, with several customers willing to make prepayments to secure supply, he said.
The scarcity would probably carry into next year, he added.
The average prices of Nanya Technology’s products are expected to rise a double-digit percentage sequentially this quarter after surging more than 70 percent last quarter, Lee said.
The price uptrend would help boost the company’s gross margin this year. Nanya Technology yesterday reported its gross margin rose to 67.9 percent last quarter from 49 percent the quarter before. The figure was minus-15 percent a year earlier, it said.
Net profit surged to an all-time high of NT$26.06 billion (US$819.9 million) last quarter, up 134.9 percent from a quarter earlier and 1,442.8 percent from a year ago, the company said.
Earnings per share jumped to NT$8.41 from NT$3.58 in the previous quarter and compared with losses per share of NT$0.63 a year ago, it said.
The AI boom is fueling strong demand for high-bandwidth memory, DDR5 and DDR4 chips, baseband management controllers and network interface controllers, the company said.
The company’s first ultra-high-bandwidth DRAM chips are contributing revenue amid increasing use of such chips in networking devices that help transmit data between AI server racks or between AI data centers, it said.
Last month, the company secured long-term supply agreement and raised NT$78.72 billion through a private placement from its customers, including SK Hynix Inc’s subsidiary Solidigm Inc in South Korea, Kioxia Corp of Japan, Cisco Systems Inc and SanDisk Corp’s subsidiary SanDisk Technologies Inc.
The company sees the partnership “a win-win situation,” Lee said. “It will enhance customers’ [competitiveness] in the AI area, while helping Nanya Technology elevate its market position in the AI value chain.”
The company said it does not expect Google’s new AI model, TruboQuant, to reduce use of DRAM chips, adding that it might increase demand, as the technology is expected to improve the efficiency of large-language-models doing inference workloads, citing discussions with Google and other AI cloud companies.
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