[News] Winbond Says Customers Seek LTAs Through 2030; Adata Expects Even Tighter DRAM Supply in 2027

Winbond and Adata held earnings calls on Aug. 6, with investors closely watching their outlook for memory prices. According to Commercial Times, Winbond’s President and Adata’s chairman both remain bullish on the market, citing sustained demand from AI servers, data centers, enterprise storage, and edge AI, noting that DRAM and NAND Flash supply is expected to stay tight, with shortages in 2027 potentially worse than in 2026.

Memory Pricing Stays Firm as Winbond Sees Tighter Market Through 2027

As noted by the report, Winbond President Pei-Ming Chen said DRAM and NOR Flash prices are expected to remain on an upward trend in the third quarter. Chen added that demand for high-capacity NOR Flash is rising rapidly as AI server racks become more memory-intensive. A single rack may incorporate 500 to 600 NOR Flash chips, with capacities scaling from 64Mb to 512Mb, 1Gb, and even 2Gb. Networking switches, base stations, automotive electronics, and edge AI are also contributing to demand growth.

Winbond reported second-quarter memory revenue of TWD 51.7 billion, with gross profit of TWD 36.37 billion and a gross margin of 70.3%. Operating profit reached TWD 29.4 billion, with an operating margin of 56.9%, while capacity utilization remained at 100%.

On pricing, as noted by Anue, Chen said DRAM and Flash prices are expected to remain on an upward trend. While DRAM bit ASPs are unlikely to repeat the 100% quarter-on-quarter increase seen in the second quarter, tight supply, strong AI demand, and an improving product mix are expected to continue supporting earnings. As for growth drivers, according to Anue, Winbond expects SLC NAND to remain a key growth engine over the next several years. Enterprise SSD DRAM cache is also expected to become another growth driver in 2027, with the business projected to account for around 10% of total DRAM revenue as shipments ramp under long-term supply agreements.

Notably, as highlighted by MoneyDJ, Winbond said customers are seeking to sign long-term agreements (LTAs) covering capacity beyond 2028, with some already beginning negotiations for 2029 and 2030. The company also expects the memory market to be tighter in 2027 than in 2026.

On the supply side, as indicated by the report, Winbond plans to increase monthly DRAM capacity at its Kaohsiung fab from 15,000 wafers to 24,000 wafers by the end of the year while accelerating its transition to the 16nm process. The company has also launched its Kaohsiung Module B project, with construction scheduled to begin in 2027 and equipment installation and mass production targeted for 2029. The new facility will support 16nm, 14nm, and 12nm processes.

Adata Expects DRAM and NAND Prices to Extend Their Rally

Meanwhile, as noted by MoneyDJ, Adata reported second-quarter revenue of NT$38.1 billion, net profit after tax of NT$10.4 billion, and earnings per share (EPS) of NT$32.39, with revenue, profit, and EPS all reaching record highs. Looking ahead, the company said the memory market remains in an upcycle and expects third-quarter performance to surpass the second quarter.

Adata expects memory pricing to remain firm. According to MoneyDJ, the company forecasts DRAM prices to rise another 20% to 30% in the third quarter, while NAND Flash prices are expected to increase 35% to 40%, with NAND Flash continuing to outperform DRAM in terms of price gains.

As MoneyDJ indicates, Adata said memory supply remains extremely tight and expects DRAM shortages to persist throughout the year, with supply becoming even more constrained in 2027, while NAND Flash shortages are expected to continue at least through the first half of 2027.

Regarding market concerns over the potential impact of Chinese memory maker CXMT’s capacity expansion, Adata believes new capacity additions by Chinese memory manufacturers are unlikely to materially alter the market’s supply-demand balance next year, MoneyDJ adds.

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(Photo credit: Winbond)