Ling Hang Forecasts Strong Profits, Memory Shortage to Last Until 2028

Ling Hang, a memory module manufacturer, anticipates sustained strong profits in the latter half of 2026, projecting that the ongoing shortage of DRAM and NAND flash memory chips will persist until 2028. Chairman Tseng Chen stated that despite rising procurement costs, the company's third-quarter earnings will remain at a high level, comparable to the first half of the year. She also noted that some cloud service providers are already discussing 2028 supply contracts with Ling Hang.

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DRAM and NAND flash memory prices are rising quarter by quarter. Despite the increase in purchase costs, the company's third-quarter profit performance will at least maintain the high level of the first half of the year.

Chen described the memory industry as being in a structural "supercycle." Ling Hang is actively stocking up, maintaining inventory levels of about three to four months, primarily sourced from South Korea's SK Hynix. She explained that the intense demand for memory from AI servers, which require eight times more memory than traditional servers, has led manufacturers to prioritize High Bandwidth Memory (HBM) production. This prioritization has caused a structural shortage in DDR4 and DDR5 memory, expected to last until 2028. Third-quarter DRAM contract prices have increased by approximately 30%, while NAND flash memory prices have surged by as much as 70%, with further increases anticipated in the fourth quarter and into next year.

Ling Hang reported significant financial growth, with last year's revenue reaching NT$7.7 billion, a year-on-year increase of over 40%, and a gross profit margin of 10%. Earnings per share were NT$6.33. In the first quarter of this year, revenue was NT$3.958 billion, with earnings per share of NT$10.76, a 177.79% increase year-on-year. The company is optimistic about future demand from edge computing AI and robotics, having entered high-value vertical markets including industrial control, AI edge, automotive, and medical sectors, with long-term partnerships in place.

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AI servers require eight times the amount of memory compared to traditional servers, leading the three major manufacturers to prioritize HBM production, causing a structural shortage of DDR4 and DDR5.

Currently, Ling Hang's orders are backlogged, with production focused on low-power DDR4. Low-power DDR5 is undergoing customer validation, with mass production and shipments expected by the end of the year. Chen highlighted strong demand from cloud service providers, enterprise clients, and industrial control sectors, noting that some CSPs are negotiating supply agreements beyond 2028. Demand from the consumer and general retail channels is currently weaker. To accommodate larger procurement volumes and optimize its financial structure, Ling Hang plans to raise capital through two additional share issuances, totaling approximately NT$10 billion, before the end of July and the year.

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Some CSP customers are negotiating supply agreements for after 2028.