Taiwanese memory makers have emerged as major beneficiaries of the recent DDR4 supply shortage, which has driven rapid price increases. Companies like Nanya and Winbond saw significant profit rebounds in August 2025, fueled by higher average selling prices and inventory write-back gains. This momentum positions them for a profitable third quarter of 2025.
Industry sources report that customers are negotiating long-term DDR4 contracts, extending order outlooks up to six years. Market estimates suggest Winbond could recover its cumulative losses from the first half of 2025 during the third quarter, with the fourth quarter expected to mark the annual revenue peak.
DDR4 contract prices surge on constrained capacity
The memory market is entering a positive cycle as the three major DRAM manufacturers allocate production capacity toward DDR4. Contract prices for DDR4 surged sharply starting in the third quarter of 2025, especially between June and July, when prices jumped about 50%. Monthly price hikes continued throughout the quarter.
Analysts estimate quarterly price increases of around 30% to 40%, though timing varies slightly among Taiwanese suppliers. Winbond's price rise in the third quarter of 2025 was relatively moderate but is projected to accelerate further in the fourth quarter of 2025.
Recently, Winbond announced net income of NT$722 million (US$23.7 million) in August 2025, an over eightfold year-over-year increase, marking a turnaround after three consecutive loss-making quarters.
Profit recovery driven by DDR4 price rebound
Market analysis indicates Winbond returned to profitability as early as July 2025, with September 2025 earnings improving further. For the first half of 2025, consolidated revenue totaled NT$41 billion, with operating losses of NT$2.26 billion and net losses attributable to parent company owners at NT$2.4 billion, including a NT$457 million loss from Nuvoton. Due to the strong DDR4 price rally in the third quarter of 2025, Winbond is expected not only to cover its accumulated losses from the first half but also to generate modest profits.
Prior inventory write-downs will be partially reversed following accounting principles as prices recover, with most reversals recognized through the third quarter and fourth quarter of 2025, and some continuing into the first quarter of 2026. From the second quarter of 2026 onward, gross margins on products should exceed overall production costs.
Long-term DDR4 contracts signal sustained seller's market
Supply chain insiders note that DDR4 shortages will persist long term, intensifying second-half order shifts. Recently, executives from a major US networking firm visited Taiwan to secure supplies. Many DDR4 customers are drafting long-term agreements to lock in total demand for 2026.
Some companies plan to propose six-year contracts upfront, although exact pricing remains uncertain until closer to shipment dates.
Despite rising DDR4 prices, mainstream users are rapidly migrating to DDR5. However, sectors such as industrial control, automotive, TV, and networking continue using DDR4 due to product design constraints, avoiding large-capacity DDR5 upgrades. Consequently, Nanya and Winbond are poised to remain among the few reliable DDR4 suppliers, sustaining a seller's market for several years.
Outlook: Steady growth for Taiwanese memory firms
Nanya and Winbond are set for a "slow start, strong finish" year in 2025, with volume and price gains across DDR4 and DDR3 boosting revenues and profits. Winbond's fourth quarter of 2025 performance will benefit from planned price hikes across its DRAM, NOR flash, and SLC NAND product lines, driving operations to an annual high.
Given ongoing DDR4 capacity constraints, market watchers expect stable pricing trends to continue into 2026.
Article translated by Charlene Chen and edited by Jerry Chen
