Memory giant Macronix (MXIC) has decided to resume its capital expenditure plan, allocating NT$22 billion (approx. US$704 million) in 2026 to aggressively expand its severely short-supplied MLC NAND production capacity and fill market gaps left by major players exiting MLC NAND.
With utilization rates nearing full capacity, Macronix will adopt a dual-line strategy to ramp up full-capacity production of both MLC NAND and NOR flash, aiming for significant revenue and gross margin growth in 2026.
Macronix president Chih-Yuan Lu said the company saw operational improvements starting in the fourth quarter of 2025 amid rapid market changes, forecasting a busy and challenging 2026-2027 period. Benefiting from order shifts and AI-driven demand, Macronix expects a strong first quarter 2026 with optimistic business prospects.
MLC eMMC key growth focus
Lu highlighted that Macronix's MLC NAND technology is mature, covering 19nm A19 2D NAND as well as 48-layer and 96-layer 3D NAND processes fully ready for production. The eMMC segment targets mid-to-high bandwidth applications. Following Samsung Electronics' official halt of MLC product manufacturing, supply has rapidly tightened, causing severe shortages impacting the industry.
Besides Micron and Kioxia, few manufacturers have mass production capability, placing Macronix in a favorable competitive position. The company views MLC eMMC as a critical growth opportunity.
Strategically, Macronix avoids competing in the high-capacity storage "red ocean" dominated by four major NAND leaders, instead focusing on the 4-32Gb mid-to-low capacity market—the sweet spot for consumer electronics, industrial control, and automotive sectors.
The 16Gb eMMC product line has entered mass production, while 32Gb variants will be gradually released, targeting full availability by end-second quarter 2026. Capital spending will accelerate the simultaneous scaling of 16Gb and 32Gb products to strengthen market competitiveness.
Lu believes that rising memory prices significantly impact gaming consoles and related systems. However, AI systems are driving sharply increased NOR flash usage, tightening supply. Macronix plans to invest NT$22 billion to expand production, increasing monthly wafer output at its 12-inch fab from 20,000 to over 30,000 wafers.
Currently, NOR flash is produced at 8-inch and 12-inch fabs without plans to shift NOR capacity to NAND. The 8-inch fab is ramping to full capacity, while the 12-inch fab maintains stable output, pushing overall utilization near maximum levels.
To meet surging demand, the 12-inch fab will flexibly allocate capacity, shifting from primarily NOR flash toward a balanced split with NAND flash—targeting over 10,000 wafers per month each—to vigorously drive MLC NAND shipments.
Capex resumption after pandemic pause
Regarding capex, Lu revealed the board approved about NT$40 billion during the pandemic, but only around NT$18 billion was used for facilities before pausing due to economic downturns. With market demand recovering, the remaining NT$22 billion budget will be fully deployed in 2026.
With cleanrooms, ultrapure water, and chemical systems already established, Macronix can quickly ramp production by moving in equipment, gaining a timing advantage over competitors still building new plants.
Macronix posted fourth quarter 2025 revenue of NT$7.7 billion, up 31% year-over-year; gross margin improved to 24.2% thanks to inventory turnover benefits, though net loss after tax was NT$294 million. Full-year 2025 EPS loss narrowed to NT$1.77, with cash reserves rebounding to NT$10.9 billion.
Inventory net value dropped to NT$9.81 billion by the end of 2025 from NT$13.41 billion at the end of 2024, signaling the near completion of stock clearance and easing operational pressures. Inventory mainly consists of NOR flash, with sales shifting to just-in-time models reflecting faster turnover. Estimated losses from the December 2025 earthquake were about NT$100 million after insurance claims.
Looking ahead to 2026, Lu described January market changes as "astonishing," with AI servers and HPC growth absorbing traditional memory capacity, leading to widespread shortages in NOR flash and SLC/MLC NAND. Macronix also secured a foothold in the Nintendo Switch 2 supply chain.
On pricing trends, channel data shows contract prices rose over 50%. While Macronix declined to comment on first-quarter price increases, it attributed this mainly to market adjustments and anticipates substantial revenue and profit growth in 2026.
Macronix decided to postpone launching its 3D NOR flash memory by two years. Lu explained that extensive customer validation is required for new 3D NOR products. Given internal resource constraints and currently subdued automotive demand—which was the primary target for 3D NOR—Macronix opted to delay the rollout.
Article translated by Charlene Chen and edited by Jack Wu
