Nanya Technology is expected to post revenue growth of 25% or more sequentially in the second quarter of 2021, buoyed by sharp DRAM price rises, particularly for DDR3 solutions, according to market sources.

Nanya has seen its DRAM contract prices rise month by month in the first and second quarters of the year, and expects the upward movement trend to persist in the third quarter based on its almost-completed price negotiations with clients for the quarter, the sources said.

Both spot market and contract prices for DRAM products are expected to hike quarter by quarter throughout 2021 and even first-half 2022, because most clients see inventory levels stay at low levels and will ramp up shipment pull-ins as new-generation notebooks and servers and 5G handsets will require higher-capacity DRAM modules, the sources continued.

Nanya now maintains a total monthly DRAM capacity at 68,000-70,000 pieces, and has raised capacity allocation to 60-70% for DDR 3 since the start of the second quarter to meet particularly strong demand for the product, the sources said. The prices of DDR3 have doubled so far this year amid serious shortages, logging even higher price increases than mainstream DDR4 solutions, the sources added.

This allowed Nanya to enjoy a 15.40% sequential increase in April revenues and another on-month growth of 2.83% in May sales, with the growth momentum to continue in June, the sources said, estimating its second-quarter revenues to grow 25-30% sequentially reaching NT$22-23 billion (US$791.36-827.34 million).

The company has entered trial production of its first 8Gb DDR4 using first-generation 10nm (1A) process, and will send samples for validation by clients in the second half of the year. It will also move second-generation 10nm (1B) technology to risk production in the third quarter, the sources said.