The shortage and price surge in memory chips has spread to the downstream packaging and testing sector. Benefiting from DRAM and NAND flash memory manufacturers ramping up shipments, memory packaging and testing companies such as Powertech (6239), Huatong (8110), and ChipMOS (8150) are experiencing a surge in orders, with capacity utilization approaching full capacity. They have recently raised packaging and testing prices, with increases reaching up to 30%. Related packaging and testing companies revealed that orders are truly overwhelming, and a second wave of price increases is not ruled out.
A year of "price and volume rising together"
Analysts believe that the price increases by memory packaging and testing companies such as Powertech, Walsin, and ChipMOS will gradually be reflected in their financial statements starting from the first quarter. If a second wave of price hikes follows, this year will be a year of simultaneous price and volume increases for the memory packaging and testing industry, significantly boosting the performance of related companies in 2026.
Regarding the price increase issue, the memory packaging and testing companies mentioned have remained relatively low-key, only emphasizing that their prices will be flexibly adjusted according to market demand.
Industry analysts believe that as Samsung, SK Hynix, and Micron expand their HBM capacity for AI applications, concentrating resources on advanced processes and packaging, they are simultaneously squeezing out standard DRAM and NAND chip production, leading to a tightening supply of older specifications.
DDR4, DDR5 and NAND
With demand recovering in cloud computing and industrial control sectors, the demand for DDR4, DDR5, and NAND chips is strong, further fueling demand for back-end packaging and testing. Major Taiwanese memory packaging and testing companies, such as Powertech, ChipMOS, and Huatong, are all operating at near full capacity, leading to price increases of up to 30%. A second wave of price hikes is possible depending on supply and demand conditions.
Powertech is a global leader in DRAM and NAND chip packaging and testing. Supply chain sources indicate that Powertech's DRAM packaging and testing capacity is currently operating at near full capacity, while its NAND capacity utilization remains high. Its customers are primarily leading international memory manufacturers, and the price increase is expected to directly impact gross margins and profits, making its performance a benchmark for the sector.
Huatong primarily focuses on niche memory packaging and testing. Over the past year, it has been significantly affected by adjustments in demand from industrial control and special applications. However, industrial control customers have gradually resumed ordering, inventory reduction has subsided, and demand has returned to above normal levels. With the overall memory industry entering a "supercycle" of economic growth, capacity utilization in East China has significantly increased, order visibility has strengthened, and the future outlook is promising.
Nanjing ChipMOS is a representative packaging and testing company that has benefited from the recovery of the traditional DRAM market. Analysts believe that while NAND flash memory accounts for a relatively small percentage of ChipMOS's revenue, it has a strong focus on DRAM. Currently, DDR4 accounts for about 70-80% of its revenue, making it the core product supporting its operations.
Source: Economic Daily
