The setup
Start with what Nanya actually is, because the entire print depends on it. Nanya Technology (2408.TW) is Taiwan’s largest DRAM maker and, on TrendForce’s 1Q26 count, the fourth-largest DRAM supplier in the world — with 1.6% market share. Both of those things are true at once because the top three take nearly everything else.
Nanya’s book is mature-node. Roughly 70% of shipments are DDR4 and low-power DDR4; DDR5 contributes about 10% of revenue; and the company builds no HBM at all. President Pei-Ing Lee has explicitly ruled out competing in HBM2, HBM3, HBM3E or HBM4. A customised HBM part for edge AI, developed with Etron, Piecemakers and Formosa Advanced Technologies, is targeted for the end of this year — a product line, not a strategy pivot.
Now set that against what happened to the market. TrendForce’s read on the quarter is that Taiwan’s suppliers — Nanya, Winbond and PSMC — “continue to focus on mature-node DRAM products, filling market gaps left as the top three memory makers shift toward more advanced processes.” That is the mechanism, stated plainly by a third party. Samsung, SK hynix and Micron moved wafer starts toward HBM and leading-edge DDR5. The capacity they moved off is the capacity Nanya sells.
Nanya did not win that position by taking share. It held the nodes it already had while the leaders walked off them.
The numbers
| Net sales | 82,549 · +68.2% QoQ · +684.2% YoY |
| Cost of goods sold | 16,930 · +7.3% QoQ |
| Gross profit · gross margin | 65,619 · 79.5% (Q1: 67.9%) |
| Operating income · operating margin | 60,826 · 73.7% (Q1: 61.3%) |
| EBITDA · EBITDA margin | 63,786 · 77.3% |
| Net income · net margin | 50,192 · 60.8% |
| EPS · book value per share | NT$14.66 · NT$93.49 |
| ASP QoQ · bit shipment QoQ · FX | >+60% · flat · flat |
| Operating cash flow · capex | 55,013 · 4,046 |
| Net cash (cash less LT debt) | 198,400 |
| Incremental gross margin (derived) | 96.5% |
| Implied D&A, EBITDA less op income (derived) | 2,960 · 3.6% of sales |
| Capex as share of operating cash flow (derived) | 7.4% |
Reported lines from Nanya’s Q2’26 investor conference deck (). The three copper rows are derived from those disclosures, not company-stated.
The company puts the whole story on one slide and declines to draw the conclusion. Revenue +68.2%. ASP “increased >60%.” Bit shipment: “Flat.” Exchange rate: “Flat.” There is no third variable left. Nanya sold the same number of bits and charged more for them.
Now run the cost line, which is where it turns structural. Cost of goods sold went from NT$15,771M to NT$16,930M — up 7.3% — while revenue went up 68.2%. Gross profit rose NT$32.3B on a revenue increase of NT$33.5B. That is an incremental gross margin of 96.5%. Ninety-six and a half cents of every additional NT dollar that came through the door stayed there.
That number is only available to a business whose costs are already sunk, and Nanya’s are. Take EBITDA of NT$63,786M against operating income of NT$60,826M: implied depreciation and amortisation for the quarter is NT$2,960M — 3.6% of sales, and about 17.5% of COGS. A DRAM maker carrying 3.6% depreciation is a DRAM maker whose fabs are paid for. Capex was NT$13.2B in 2023, NT$16.1B in 2024 and NT$13.4B in 2025 — three years of maintenance spending through a downturn. The asset base rolled off the books, and then the price went up.
Hold onto that 3.6%. It is the number Fab 5A is about to change.
The rest of this dive is for paid subscribers.
The headline numbers are above. The 6 sections below carry the mechanism, the peer read, the valuation work, and the dated tests that decide it.
- What’s actually driving it
- How peers read this
- Valuation reality check
- What we’d watch from here
- The trade
- Bottom line
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