Nanya Technology of Taiwan, which holds a 1.6% share of the global DRAM market, has made a bet on advanced DRAM investment aimed at the artificial intelligence (AI) era. Based on the revenue earned from a shortage of DDR4 supply that arose as the "big three" — Samsung Electronics, SK hynix and Micron — shifted production to advanced products such as high bandwidth memory (HBM) and DDR5, the strategy is to leap from a legacy DRAM maker to an advanced DRAM maker.
According to market research firm TrendForce on the 6th, Nanya plans to invest up to 346.6 billion New Taiwan dollars (about $10.7 billion·15 trillion won) in its new Taiwan fab, Fab 5A, from 2026 to 2029. It is the largest single investment in Taiwan's DRAM industry in about 20 years. Depending on market demand, the total investment could increase to as much as $16 billion.
The new fab will introduce extreme ultraviolet (EUV) lithography equipment. EUV is advanced equipment that etches fine circuits onto wafers using light with an extremely short wavelength, enabling the production of more chips and improving performance and power efficiency. The global DRAM top three — Samsung Electronics, SK hynix and U.S.-based Micron — are also using EUV in advanced DRAM production.
Nanya has so far maintained a business structure centered on commodity DRAM such as DDR3 and DDR4. As of the first quarter of this year, its global DRAM market share is 1.6%, ranking fifth. It has pursued a strategy of securing revenue by targeting the commodity DRAM market left open as the big three moved to advanced process nodes.
However, it plans to change its business structure starting with Fab 5A. The new fab will sequentially introduce 10-nanometer-class 1b, 1c, 1d and 1e process nodes. It is currently running trial production on the 1c node and is also developing the 1d node. It will expand the share of DDR5, which accounts for about 10% of total sales, and will begin customer qualification for mobile LPDDR5 in the second half of this year.
Fab 5A will begin wafer production in the second half of 2027. Capacity will be expanded to 30,000 wafers per month in 2028, 35,900 per month in 2029, and up to 45,000 per month. Nanya also increased this year's capital expenditures (CAPEX) by 34% to 69.7 billion New Taiwan dollars from 52.0 billion, and the additional funds will be used for down payments on Fab 5A equipment and other items.
Behind this large-scale investment is a boom in the DDR4 market. As Samsung Electronics, SK hynix and Micron shifted capacity to higher value-added products such as HBM and DDR5, DDR4 supply declined, but demand from industrial, server and PC segments held up, sending prices sharply higher. With a high share of commodity DRAM, Nanya is among the companies that benefited the most.
In fact, Nanya's sales last month hit a record high of 43.87 billion New Taiwan dollars, up 719.6% from a year earlier. They also rose 49.3% from the previous month. First-quarter sales this year came in at $1.55 billion, up 60% from the previous quarter, driven by higher DDR4 and DDR3 prices and lower inventories.
Industry watchers say Nanya is moving to improve its business fundamentals by reinvesting cash secured from the commodity DRAM boom into advanced process investments. As the market reorganizes around AI memory, the analysis is that the company aims to accelerate its entry into the advanced DRAM market based on the revenue secured from the DDR4 windfall.