Nanya Technology to Develop Customized Chips for Edge AI Devices
Taipei, Taiwan – Nanya Technology Corp, a Taiwanese DRAM chip manufacturer, is pivoting its strategy to focus on customized high-bandwidth memory (HBM) chips for edge artificial intelligence (AI) devices. This move aims to set the company apart from its rivals in a competitive market, according to company president Lee Pei-ing.
“Our focus is on ‘customized’ HBM products for edge AI devices,” Lee stated to reporters in Taipei. He emphasized that the company would not target the HBM3, HBM4, and HBM2 markets used in AI servers, as the company is smaller in scale and has more limited resources. The decision reflects a strategic focus on a niche market within the broader AI landscape.
Nanya Technology Corp president Lee Pei-ing
The company is aiming to introduce its first customized HBM product by the end of next year. This initiative involves collaborations with chip designer Piecemakers Technology Inc and chip packaging and testing service provider Formosa Advanced Technologies Co. Additionally, Nanya Technology is working with a logic chip supplier to complete the HBM product, which involves stacking advanced DRAM chips on a small logic chip. The name of the logic chip partner was not disclosed.
“Under the current market situation, Nanya Technology is unlikely to compete with those chipmakers by capacity, cost efficiency or investment scale, especially those from China. The company needs to differentiate its products and to find its value when the world ushers in the AI era,” Lee explained. “Customized HBM products are critical for Nanya Technology’s growth.”
The company also plans to increase the contribution of DDR5 chips to about 30 percent of overall DRAM production this year. A majority of its DRAM capacity is currently dedicated to DDR4 chips.
Lee also commented on the impact of competition from Chinese rivals. He noted that the impact is “enormous” for the whole industry, not just Nanya Technology. “Without the huge capacity from that Chinese chipmaker, the low-power DDR4 and DDR5 market would have recovered,” he said.
The Chinese company Changxin Memory Technologies Inc, backed by significant government funding, has grown into a major memory supplier with a capacity seven times that of Nanya Technology. Lee indicated that DRAM demand has improved since China launched new subsidy programs for electronics purchases last quarter.
He also mentioned that the supply of DRAM chips for non-AI devices is decreasing. Major players such as SK Hynix Inc. and Samsung Electronics Co. are allocating more capacity for HBM chips used in servers. Furthermore, the inventory situation of the world’s top three DRAM producers, including Micron Technology Inc., is also improving, which signals positive trends for the industry. Lee suggested that a price rebound is likely in the second half of this year.
In related news, the company’s board of directors decided against distributing a cash dividend this year despite the fact that the company’s losses shrank to NT$5.08 billion (US$154.9 million) last year from NT$7.44 billion in 2023. The board also approved capital expenditure of NT$19.6 billion this year to expand capacity for its second-generation 10-nanometer-class process technology, which is between 10 and 19 nanometers.
