Server Demand Drives Prices Higher
Local institutional analysts point out that DRAM will remain in short supply in 2027, with prices in an upward cycle, mainly as servers account for more than half of total bit demand, and Server-related DRAM orders are growing strongly, driving overall prices higher. The supply-demand gap in the server segment reaches more than 20%, far above the overall DRAM level of about 10%. With limited capacity supply from international manufacturers, a tight market pattern is established. As the largest DDR4 manufacturer, Nanya Technology (2408) operations will enter an explosive period. Yuanta Investment Consulting reiterates a Buy rating, and estimates a target price of 570 based on 2027 book value per share of 230.7 and 2.5 times price-to-book ratio.
DDR4 Gap Exceeds 20%, Contract Prices at High Levels
Although AI server business is booming, currently about 10% of peripheral applications in AI Servers still use DDR4, and with large consumer and networking demand, DDR4 demand is supported. With international original manufacturers sharply reducing supply at end-of-life of product life cycles, and CXMT shifting focus to DDR5, it is estimated that DDR4 will still face a huge supply-demand gap of more than 20% in 2027, with contract prices remaining at high levels.
Limited Production Increases by Top Three Manufacturers
Supply-side expansion is relatively constrained. Yuanta Investment Consulting expects the HBM market size to grow 243% year-on-year in 2027, with Nvidia VR200 equipped with SOCAMM2 bit demand growing 6 times, driving strong growth in RDIMM and LPDRAM. However, the monthly DRAM wafer input capacity of the global top three manufacturers by end-2027 will only increase 10% to 15% year-on-year, while China peer CXMT capacity accounts for only about 15% of the total and mainly supplies domestic demand in China. Nanya Technology currently has monthly capacity of about 65kwpm, with phased additions of 35.9kwpm over the next four years, expected to start contributing only in 2H27, making it difficult to reverse the tight supply pattern.
EPS Estimated to Rise from 75.93 to 128.01
Benefiting from rising prices and optimized product mix, Yuanta Investment Consulting estimates Nanya Technology 4Q26 revenue will increase 13.2% quarter-on-quarter to 1,512.46 billion, average selling price will rise another 15% to 20% quarter-on-quarter, and EPS will increase 11.9% quarter-on-quarter to 28.42. For 2026 and 2027, revenue is estimated to grow 525.5% and 66.8% year-on-year to 4,165.31 billion and 6,946.17 billion respectively, with gross margins surging to 82.5% and 84.5%, and EPS rising from 75.93 in 2026 to 128.01 in 2027. With dual-track deployment in DDR4 and DDR5 and contributions from customized products, a substantial profit leap will become the core momentum driving the share price.