Nanya Technology (2408) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached NT$7,188 million, up 9.3% sequentially but down 24.4% year-over-year, driven by increased shipments despite a slight decrease in ASP and ongoing technology migration costs.

• Net loss widened to NT$1,941 million with a margin of -27.0% and EPS of NT$-0.63, reflecting higher costs from technology transition and product mix.

• Bit shipment increased high single digits quarter-over-quarter, while ASP decreased low single digits.

• Technology migration to self-developed 1B and second-generation 10nm-class nodes is underway, with 1/3 of wafer input expected to be 1B by Q2 2025.

• DDR5 shipments began in Q1, with 5600 speed delivered and 6400 speed sampling; DDR5 contribution to total shipments remains low but is expected to grow.

Financial highlights

• Gross loss was NT$1,075 million, with gross margin at -15.0%, down 4.4 percentage points sequentially.

• Operating loss was NT$3,155 million, operating margin at -43.9%.

• EBITDA for Q1 was NT$797 million; non-operating income NT$732 million.

• Free cash flow was negative NT$8,432 million in Q1 2025.

• Book value per share stood at NT$52.89 at quarter end.

Outlook and guidance

• Full-year bit shipment growth guidance raised to over 30% year-over-year, up from previous 20%, due to technology migration and improved market demand.

• 2025 CAPEX plan set at NT$19.6 billion, with Q1 2025 CAPEX at NT$6.5 billion.

• DRAM market demand expected to improve in 2025, driven by AI and inventory reduction, but tariff conflicts may pose risks.

• Break-even at operating level targeted for end of Q2 or early Q3, with further improvement expected in Q3 and Q4 as depreciation costs decline.

• Production line development for third and fourth generation 10nm-class (1C and 1D) and customized products remains on schedule.