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🇰🇷 South Korea /Economy & Trade

AI Boom Fuels Dramatic Comeback for Taiwan's Nanya Technology

From Hankyoreh · (22h ago) Korean Positive tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • Taiwan's Nanya Technology, a minor player in the memory chip market, reported a significant profit surge in the first quarter, exceeding 1 trillion Korean won.
  • This turnaround follows two years of losses, driven by a global boom in AI investment that has boosted demand and prices for even older-generation DRAM chips.
  • The company anticipates continued price increases for DRAM in the second quarter, despite concerns over raw material supply and internal discussions about employee bonuses versus shareholder dividends.

Nanya Technology, long considered a laggard in the global memory semiconductor market, is experiencing a remarkable resurgence, driven by the insatiable demand fueled by the artificial intelligence boom. The Taiwanese firm, which typically holds a minimal market share, posted an operating profit exceeding 1 trillion Korean won in the first quarter of this year alone. This impressive figure not only erases the cumulative losses incurred over the past two years but also significantly surpasses the quarterly profits of major South Korean companies, highlighting a dramatic turnaround.

The company's success underscores a broader trend in the semiconductor industry: the AI revolution's ripple effect is reaching even the most modest players. While industry giants like Samsung and SK Hynix dominate the market, Nanya's focus on older-generation DRAM chips, such as DDR4, has unexpectedly benefited from the global shortage. The fixed price for these chips has seen a tenfold increase over the past year, a testament to the widespread demand across various applications, including computers and servers.

Helium can be obtained from regions other than the Middle East, so there is no immediate supply shortage problem, but the price is definitely rising.

— Pei-Ing LiPresident of Nanya Technology, addressing concerns about semiconductor production materials.

Looking ahead, Nanya Technology remains optimistic, projecting further price increases for DRAM in the second quarter. However, the company acknowledges potential challenges, including supply chain concerns for essential materials like helium and bromine, exacerbated by geopolitical tensions. Internally, Nanya is navigating discussions about profit distribution, balancing the desire to reward employees with special bonuses against the need for capital investment in new facilities and future development, a familiar tension seen in the semiconductor sector globally.

We are trying to share bonuses with employees. This year, due to the need for funds for new factory construction and strengthening future development capabilities, the dividend ratio may decrease.

— Nanya Technology SpokespersonResponding to questions about shareholder dividends versus employee bonuses amid record profits.
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Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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