AlphaLens
Research
研报Overweight3月19日 · Morgan Stanley

Greater China Semiconductors: Old Memory: Turning Selective

2337.TW2344.TW2408.TW6531.TW
中文EN⚠ quality lint: see notes

Shifting from DDR4 to Legacy Flash: Favor Macronix, Downgrade Winbond and Nanya Tech

Core Conclusion

The old memory cycle is pivoting, demanding a rotation from DDR4-exposed names to beneficiaries of a severe legacy NAND shortage. We downgrade Winbond and Nanya Tech to Equal-weight and elevate Macronix to Top Pick. Macronix's unique position as the primary supplier of MLC/legacy TLC NAND, facing a ~40% undersupply, drives substantial pricing power and ROAE expansion, justifying further P/B re-rating despite recent outperformance. AP Memory remains Overweight on advanced packaging opportunities.

Evidence Chain

Macronix (2337.TW) is the primary beneficiary of a deepening legacy NAND shortage. The supply-demand gap for MLC and legacy TLC NAND is expected to reach ~40% in 2H26, as global capacity for 2GB-64GB NAND has largely vanished and customer inventories cover only 6-9 months. Macronix is the only remaining supplier capable of filling this gap. We expect MLC/legacy TLC pricing to rise over 200% from 1Q26 to 4Q26, driving our 2027 EPS estimate of NT$19.61, 31% above consensus. This pricing power should propel annualized ROAE to 65% by 1Q27, supporting a forward P/B of 7.0x (vs. a historical average of 1.5x) and our new price target of NT$202.

DDR4 pricing momentum is peaking, pressuring Winbond (2344.TW) and Nanya Tech (2408.TW). DDR4 8Gb prices have surged 752% YoY to US$11.5 in Feb-2026, with near-term quotes reaching $17-18. However, customer pushback is emerging, and the supply-demand imbalance is narrowing. Supply is increasing from Winbond (100% YoY bit growth in 2026) and potential new capacity from PSMC and CXMT (adding 10kwpm by 2027). Concurrently, 3C demand is weakening. We expect DDR4 undersupply to narrow to <20% in 2H26, leading to moderating Q/Q ASP growth from 50% in 1Q26 to 10% in 4Q26. This limits further upside for DDR4-focused players.

AP Memory (6531.TW) offers a non-cyclical growth vector in advanced packaging. The company is set to capture new interposer opportunities with Mediatek, ramping in 2028. Its Wafer-on-Wafer (WoW) packaging technology addresses critical AI computing bottlenecks of memory bandwidth and power. This positions AP Memory for sustained growth beyond the volatile memory cycle, justifying a 2026e P/E of 44x.

Key Risks

  • Supply-Demand Reversal: Faster-than-expected capacity additions in legacy NAND or a sharper drop in DDR4 demand could undermine pricing assumptions.
  • Competitive Pressure: CXMT's aggressive DDR4 capacity expansion in 2027 could accelerate price declines.
  • Execution Risk: Delays in AP Memory's advanced packaging ramp or technology adoption.
  • Macro Sensitivity: A broader slowdown in consumer electronics (3C) could weaken underlying memory demand faster than expected.

Valuation and Trade Implications

We downgrade Winbond to EW (PT NT$140) and Nanya Tech to EW (PT NT$298) on peaking DDR4 fundamentals. We upgrade Macronix to Top Pick and Overweight (PT raised to NT$202) on its superior pricing power trajectory in legacy Flash. We maintain Overweight on AP Memory, raising our PT to NT$700. The trade is a pair: long Macronix, underweight/short Winbond and Nanya Tech.

Related (同 ticker)