The DRAM industry is entering an upcycle. Local institution Yuanta Investment Consulting said in a report that, benefiting from strong growth in Server-related DRAM orders driving overall prices higher, coupled with limited supply from international majors, undersupply is now established. As the No.1 DDR4 maker, Nanya Technology (2408) is expected to enter a boom. The institution reiterated a Buy rating, estimating a target price of 570元 based on 2027 book value per share of 230.7元 and a 2.5x price-to-book ratio.
DDR4 Shortage Exceeds 20%, Prices Stay High
The report analyzes that DRAM will remain in undersupply in 2027 with prices in an upcycle, mainly as Server accounts for more than half of total bit demand with a supply-demand gap of more than 20%, far above the roughly 10% level for overall DRAM. Although AI server demand is booming, about 10% of peripheral applications in AI Servers still use DDR4, in addition to huge consumer and networking demand. With international majors sharply cutting supply at end-of-life and ChangXin Memory Technologies shifting focus to DDR5, DDR4 is still expected to face a supply-demand gap of more than 20% in 2027, with contract prices remaining high.
Limited Expansion by Top Three Makers Keeps Supply Tight
On the supply side, the HBM market is expected to grow 243% year-on-year in 2027, with Nvidia VR200 carrying SOCAMM2 bit demand growing 6x, driving strong growth in RDIMM and LPDRAM. However, the monthly DRAM wafer output of the global top three makers through end-2027 will only grow 10% to 15% year-on-year, while China’s ChangXin Memory Technologies accounts for only about 15% of total capacity and mainly serves domestic demand in China. Nanya Technology currently has monthly capacity of about 65kwpm, with 35.9kwpm to be added in phases over the next four years, expected to contribute only from 2H27, making the tight-supply格局 difficult to reverse.
EPS Estimated Above NT$100 With Strong Earnings Momentum
On earnings, benefiting from rising prices and an optimized product mix, Nanya Technology’s 4Q26 revenue is estimated to grow 13.2% quarter-on-quarter to 1,512.46億元, with average selling price up 15% to 20% quarter-on-quarter and EPS up 11.9% quarter-on-quarter to 28.42元. Looking to 2026 and 2027, revenue is estimated to grow 525.5% and 66.8% year-on-year to 4,165.31億元 and 6,946.17億元 respectively, with gross margins of 82.5% and 84.5%, and EPS growing from 75.93元 in 2026 to 128.01元 in 2027. With its dual-track DDR4 and DDR5 layout and contributions from customized products, earnings growth will be the core driver of the share price.