Morgan Stanley: Nanya Technology (2408.TW) DDR4 Supply and Demand to Remain Imbalanced Into 2027; OW
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Morgan Stanley maintains an Overweight rating on Nanya Technology (2408.TW) with a target price of NT$298, citing a persistent DDR4 shortage extending into 2027 as major DRAM manufacturers exit the market. For 4Q25, Nanya reported EPS of NT$3.58, beating estimates by 46%. Revenue surged 60% quarter-over-quarter and 358% year-over-year, while gross margin expanded to 49% from 18.5% in 3Q25, driven by price hikes, favorable depreciation, and product mix.
Despite planned capital expenditure of NT$50 billion for 2026, new capacity will only come online in 4Q27, adding a modest 15-20kwpm. DDR5 revenue has reached a low-double-digit percentage of the mix, with WeeWafer and HBM mass production pulled forward to 1H26. Nanya is expected to deliver strong ROE of 43% and 50% for 2026 and 2027, respectively, supporting valuation multiples of 3.5x and 2.1x forward book value.
Morgan Stanley lowered its 2026 EPS forecast by 46% to NT$29.87 to reflect the company's disciplined customer pricing strategy. However, the 2027 EPS estimate was raised by 27% to NT$56.40 on anticipated sustained pricing power. Key catalysts include monthly revenue updates and forthcoming earnings from major DRAM peers.