What is driving the near-term improvement in the memory business?
- Company executives said overall memory prices continued to rise in the fourth quarter, with high-capacity NOR Flash prices continuing to increase. For DRAM, overseas manufacturers have raised prices at different paces, leaving some customers facing substantial increases, while increases for some products have narrowed.
- Management expects memory gross margin to continue rising in the fourth quarter. However, global DRAM capacity is tight, and the company expects memory shipments in 2027 to be similar to those in 2026, while average selling prices remain stable or rise because of supply shortages.
When will capacity catch up with growing NOR Flash demand?
- The company said customers’ NOR Flash orders for 2027 have increased significantly and that customers want to sign long-term agreements to secure supply. Samsung and Micron have reduced capacity in this area, and strong end-market demand has contributed to a severe supply shortage, with prices rising nearly tenfold during the year.
- The company is working with factories and plans to secure capacity through capital investment and long-term agreements. Previously reserved capacity related to SLC, MLC and low-capacity NAND is expected to be brought online and made available to the market gradually from the second half of 2027 or from 2028.
What progress has been made in AI?
- The company said it became a major supplier to leading AI server manufacturers in 2026 and continues to receive order updates. It expects further growth in this area in 2027.
- In edge computing, the company has established its low-compute-power smart vision SoC portfolio and has largely finished refining products including AI-enabled network cameras, action cameras and laptop cameras.
- The company is also developing chips for high-compute-power edge applications, targeting support for models with 7 billion and 11 billion parameters. The related products are planned to be progressively put in place in 2027.