Release Date: January 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nanya Technology Corp (TPE:2408, Financial) reported a year-over-year net sales improvement of 14.2% for 2024, indicating a positive trend in revenue growth.
- The company has successfully ramped up its second-generation 10-nanometer class technology, with expectations to exceed 30% of total output by 2025.
- Nanya Technology Corp is strategically developing partnerships to explore market opportunities in edge computing and AI, with plans to release new products by the end of 2026.
- The company has received multiple ESG recognitions, including the DJSI World Index for the fourth consecutive year and an MSCI ESG rating upgrade to AA.
- Nanya Technology Corp maintains a positive net cash position of TWD36.6 billion, indicating financial stability despite current challenges.
Negative Points
- Q4 2024 net sales decreased by 19.2% compared to Q3, with a gross profit turning negative due to power outages and production reductions.
- The company reported a net loss of TWD1.574 billion for Q4 2024, slightly worse than the previous quarter.
- Operating income remained negative at minus TWD2.812 billion, with a marginal increase in operating loss compared to Q3.
- The demand for general PC, mobile, and consumer products remains weak, affecting overall market performance outside of AI-related sectors.
- Nanya Technology Corp's earnings per share for 2024 were negative, at minus TWD1.64, indicating ongoing financial challenges.
Q & A Highlights
Q: Can you provide an update on the DDR5 production volume and its impact on total output for 2025?
A: As of January, DDR5 production is more than 20% of our total output. We aim for DDR5 to constitute 30% of our total production in 2025, with the potential to exceed this target. The second half of 2025 is expected to see a penetration ratio of 50% or higher. The ASP for DDR5 is expected to have a premium over DDR4, but exact figures depend on market trends. – Pei-Ing Lee, President
Q: What are the expectations for operating margin improvement, and what factors will drive this change?
A: Our operating margin was at -43% in Q4. Improvement is expected as we introduce more 1B technology and DDR5. We anticipate cost reductions, particularly in depreciation, by Q4 2025. The general DRAM market, excluding AI, is expected to improve in the second half of the year. – Pei-Ing Lee, President
Q: What are the assumptions for 2025 bit growth, and how does inventory clearance affect short-term shipment growth?
A: We anticipate over 20% bit growth in 2025, driven by the transition to DDR5 and 1B technology. Inventory clearance is ongoing, and while Q1 may not see significant growth, improvements are expected from Q2 onwards due to economic recovery and inventory adjustments. – Pei-Ing Lee, President
Q: Can you elaborate on Nanya's plans for AI edge computing products?
A: We are developing products for AI edge applications, including AI PCs, mobile phones, and robotics. These products will require both low power and high bandwidth. We aim to release products by the end of 2026, focusing on customer-specific designs. – Pei-Ing Lee, President
Q: Is there evidence of a recovery in consumer demand for the second half of 2025?
A: We see encouraging signs in the consumer market, supported by economic stimulation packages and inventory improvements. We expect the non-AI market to start recovering in the second quarter of 2025. – Pei-Ing Lee, President
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
