Ladies and gentlemen, welcome to Nanya Technology Q4 2025 Investor Conference. I am Pei-Ing Lee.

The content of my presentation to you first start with Q4 2025 revenue and results, and followed by year 2025 revenue and results, then followed by capex and shipment, market outlook, and conclude by business review and outlook. Q4 2025, the net sales, 30.094 billion NT dollars, compared to Q3 25.779 billion NT dollars quarter to quarter, up by 60.3%.

Compared to Q4 last year, 6.575 billion NT dollars, year to year, up by 357%. Gross profit, 14.759 billion NT dollars, at the margin 49%, compared to Q3 3.465 billion NT dollars, at margin of 18.5%.

Operating income, 11.781 billion NT dollars, at 39.1% compared to Q3 1.119 billion at 6%. EBITDA at Q4, 14.74 billion NT dollars at 49%, compared to Q3 4.731 billion NT dollars at 25%.

Non-operating income, 1.602 billion NT dollars, and income tax expense, 2.3 billion NT dollars. The net income comes to 11.083 billion NT dollars, at 36.8%, compared to Q3 1.563 billion NT dollars at 8.3%.

I will explain the reason why in the next few slides. Earnings per share at 3.58 dollars per share, compared to 0.5 dollars per share in Q3.

Book value per share, 54.99 dollars per share, compared to Q3 of 50.78 dollars per share. For quarterly revenue result comparison, the revenue quarter to quarter up by 60.3%, and year to year up by 357%.

From ASP point of view, quarter to quarter increase by 30s, and year to year increase by 80s. Shipment-wise, quarter to quarter increase by low teens, and year to year increase by 1.5 times.

Exchange rate, favorable, mid single digit for quarter to quarter, and unfavorable, mid single digit for year to year. A little detailed comparison for Q4 25 and Q3 25 results.

Net sales at Q4, 30.094 billion, versus Q3 18.779 billion, up by 60.3%. The reason is ASP increased by 30s, and shipment increased by low teens, and exchange rate favorable, mid single digit.

Gross profit for Q4, 14.759 billion NT dollars, at 49% margin, compared to Q3 3.465 billion NT dollars at 18.5% margin. The gross profit increased by 11.3 billion, mainly due to higher ASP and higher shipment.

Operating expense at 2.979 billion NT dollars, compared to Q3 2.346 billion NT dollars, operating expense increased by 0.6 billion. Operating income at Q4 comes to 11.781 billion NT dollars, at margin of 39.1%, compared to Q3 1.119 billion at margin of 6%.

Operating income increased by 10.7 billion NT dollars. Net income comes to 11.083 billion NT dollars, at net margin of 36.8%, compared to Q3 of 1.563 billion NT dollars at margin of 8.3%.

The net income increased by 9.5 billion NT dollars due to exchange rate favorable of 0.2 billion and income tax unfavorable of 1.8 billion, and also operating income increased by 10.7 billion NT dollars. For operating expense, SG&A comes to 855 million NT dollars, and the R&D comes to 2.123 billion NT dollars.

The R&D mostly is normal range, and SG&A expense marginally increased due to we had recognized employee bonus distribution. For cash flow, Q4 last year beginning balance 52.313 billion NT dollars, with cash from operating activity, from the right chart you can see that the cash from operating activity comes in 15.169 billion NT dollars, minus capital expenditure of 2.24 billion, and then minus the financial activity.

Basically, we pay out the debt repayment of the bottom note, 8.9 billion NT dollars. The end balance comes to 57.73 billion NT dollars, with free cash flow of 12.929 billion NT dollars.

If you pay a little bit attention to the bottom notes, you see that we have payback debt payment of 8.9 billion, and then we also have net cash by the end of Q4. Net cash and equivalent comes to 38.5 billion NT dollars.

That means the cash minus the debts comes to 38.5 billion NT dollars, which compared to Q3, the net cash is around 24.2 billion NT dollars. For 2025, the whole year revenue and result.

For 2025, net sales comes to 66.587 billion NT dollars, compared to 2024, 34.132 billion NT dollars, year-to-year growth of 95.1%. Gross profit, 14.984 billion NT dollars, at the whole year of margin 22.5%, compared to 2024 loss of 421 million NT dollars.

Operating income, 5.243 billion NT dollars, at 7.9%, compared to 2024 loss of 10.5555 billion NT dollars. Operating income, 2.639 billion NT dollars, non-operating income, 2.639 billion NT dollars, and income tax benefit this year is the expense, 1.279 billion NT dollars.

Net income comes to 6.603 billion NT dollars at 9.9%, compared to last year loss of 2024, loss of 5.083 billion NT dollars. Earnings per share for 2025, 2.13 dollars profit, compared to 2024 loss of 1.64 dollars per share.

Book value for 2025, 54.99 dollars per share, compared to end of 2024, 53.27 dollars per share. The comparison between 2025 and 2024 financial results: net sales 66.587 billion NT dollars, compared to 2024, 34.132 billion NT dollars, year-to-year improvement of 95.1%.

The remark there is that the ASP increased by 30%, and shipment increased by 50%, and exchange rate unfavorable, missed single digit. For the gross profit, 14.984 billion NT dollars, at margin of 22.5%, compared to 2024 loss of 421 million NT dollars, and the gross profit increased by 15.4 billion NT dollars, mainly due to higher ASP and shipment.

For operating expense, 9.741 billion NT dollars, compared to last year, is very much similar. Operating income, 5.243 billion NT dollars, at margin of 7.9%, compared to 2024 loss of 10.5555 billion NT dollars.

The net income comes to profit of 6.603 billion NT dollars, compared to 2024 loss of 5.083 billion NT dollars. The net income year-to-year improved by 11.7 billion, and exchange rate unfavorable by 2.8 billion, and income tax unfavorable by 2.8 billion, and exchange rate unfavorable by 0.9 billion NT dollars.

A little summary of 2025 sales and EPS by quarter, and on the left-hand side of the chart, the net sales improved quarter by quarter very significantly, and fourth quarter result is unaudited. On the right-hand side of the chart, earnings per share Q2 Q, from the first quarter and second quarter loss of total near 2 dollars, and the second half of the year Q3 positive 0.5 dollar per share, and Q4 positive 3.58 dollars per share.

For CapEx and shipment, 2025 CapEx 13.4 billion NT dollars, with around 6.2 billion NT dollars being postponed to 2026. For 2026, we plan to target 50 billion NT dollars capital expenditure.

This is still subject to board approval. Our wafer CapEx is around 30% of this total CapEx for 2026.

The rates of 70% will be used for new fab construction and facility. Shipment for 2025, shipment is up by 50% year-to-year, and 2026, the shipment target to be up by teens year-to-year.

For market outlook, overall market, the AI cloud server and general server continue to drive 2026 DRAM demand. Supply shortage may persist for multiple DRAM products, such as including DDR5, mobile DDR5, DDR4, mobile DDR4, or even DDR3, due to capacity constraints.

Bandwidth and high-density DRAM continue to expand across cloud and HAI applications in the next few years. On the supply side, we see limited new supply capacity expected for 2026 and first half of 2027.

We also see the supplier has been optimizing their product portfolio to meet various customer requirements. Demand side, for server, demand for high-bandwidth memory and conventional RDIMM is increasing significantly.

For PC and mobile, continue to see DRAM content increase per box. For consumer, we're seeing a wide range of consumer electronic applications sustain solid demand.

For business review and outlook, first, Q4 2025 gross margin 49%, net margin 36.8%, and EPS 3.58 dollars per share. For the whole year 2025 gross margin 22.5%, net margin 9.9%, and EPS 2.13 dollars per share.

Nanya has been getting 128 gigabyte DDR5 RDIMM ready for 5600 and 6400 speed, and monodie meet 7200 speed level. We continue to optimize our supply to DDR4 and low-power DDR4 to consumer market.

Our third generation 10 nanometer and fourth generation 10 nanometer and also customer-made AI project are going on on schedule, and our new fab equipment move-in are expected in early 2027. Also Nanya has received ESG recognition from CDP for A list in climate change and water security.

We also received recognition from TCSA for annual-based corporate sustainability reporting award, top 100 Taiwanese sustainable company, and four leadership awards. With that, now we may move to question and answer session.

Yes. Hi, good afternoon, and thanks for taking my questions.

In the current environment, do you actually see customers starting to de-spec as they may not be able to get exactly the volumes they need on the DRAM side? If so, in which markets are currently seeing any signs of de-specing?

I got a couple of follow-ups. Thank you.

De-spec case, we do see some, but not major of the customer doing de-specing. There are some de-specing maybe in the TV section.

Some of the TV user may de-spec from their use of DDR4 and low-power DDR4 down to DDR3. This is not a major quantity.

This is limited quantity. Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN and Head of APAC Technology, UBS): Thank you.

Thank you.

Thank you. Appreciate that follow-up.

On your side, you just talked about mid teens bit growth for full year. Going to first quarter, what could be a reasonable range for shipments for Nanya Tech?

Shipment-wise, Nanya will not be Q-to-Q increase substantially because we are in full capacity already, and also with the depleted inventory, likely we will not be seeing Q-to-Q shipment increasing substantially. However, year to year, we will be seeing some shipment increasing, mostly due to beginning of last year the shipment is low, okay, and that is made up in this year.

Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN and Head of APAC Technology, UBS): Great. Thank you.

Lastly on my side, considering the environment we're in, I know initial plan was to roll out new capacity with a new fab in 2027. Is there anything you can do to pull in the timeline potentially, as you know clearly you're effectively capacity constrained in the current environment?

Yes. As I described, currently our new fab, the shell is almost ready, and we will be doing facility clean room for this year and start to bring in equipment beginning of next year, and hopefully by that we can have some output by the end of first half and gradually ramping up in the second half.

Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN and Head of APAC Technology, UBS):

Great, thank you.

Maybe next question, I made a bit of additional comment is that in the beginning we are not targeting full fab loading. We are targeting for between 15K to 20K of first phase of capacity loading.

Hey, Dr. Lee, good afternoon, and also congratulations for a very strong result.

My first question is that do you plan to change your price quotation behavior? Because one of the major Korean fabs this year, they changed to monthly quotation.

I know you kind of honor all those contracts with your customers, right? Reality is that there are very strong demand, double booking, etc.

Just want to double check: do you want to change the contract negotiation to a monthly update?

As a matter of fact, no, we don't. We don't change our contract behavior for long-term customer.

We will stick with the current price quotation. Okay?

As a matter of fact, with the uptrend, most of customers want to secure a longer-term of the negotiation. We are working with the customer case by case to see their need and what we can do for our customer.

Okay? The answer is no, we don't change our behavior.

The second question is double booking. That's a very good question.

Under the current business environment, it's very possible that customer would like to secure more delivery so that they can secure making sure that their production will be going on well. Okay?

Therefore, we have to work closely with our customer. Our sales has looked into this very closely for many years with our customer.

We will be looking into customers' typical normal running rate and going from there to arrange our allocation to customer. We want to make sure that customer do have parts to run their fab, okay, run their business.

We want to prevent customer putting their parts into our parts into the inventory, into the shelf. Okay?

That is all being going around worldwide, okay? Our sales individual has been working on that closely.

Thanks Dr. Lee.

My second question is about do you see potential supply chain disruption because of lack of DDR4 components? If that's the case, which area do you see the urgency?

We are hearing automotive, networking, even AI server, general server, BMC, whatsoever, right? Lots of critical tech device needs your chip.

How you are going to make sure that wouldn't cause the supply chain disruption? If that's the case, do you think your competitors, by no matter Korean or Chinese competitor, to extend their DDR4 offering?

I know some of them is going to do EOL, but do you expect any extension of the offering of those DDR4?

Far, we don't see supply chain disruption yet, okay? For the critical market sector, as you mentioned BNC, NIC, those is the sector that likely to be priority fulfilled.

Okay? Then you mentioned that the supplier end of life, okay?

They may extend their residual capacity. That's where we'll know, okay?

Actually, it's very good they do extend that to making sure that customer do have sufficient parts. Okay?

The point is that for those production line has been relocated to different production, it's very difficult to move it back and forth. The best that most of supplier can do is to continue to extend the lifetime of residual capacity.

Great. One financial question, if I may, to ask CFO Joseph.

Can we get your latest depreciation schedule for 2026 and 2027? That's why we can calculate your future gross margin trend.

Thank you. Regarding the depreciation rate, as we mentioned already that in Q4 we are comparing in lower depreciation result, and moving on to the 2026, I think we'll keep the similar trend continuous this year.

That's the check as we mentioned already. Because the existing two fabs, 3A and 3AN fab, there's quite a few equipment already depreciated, and more and more will be more depreciated.

We see our depreciation going to be improved gradually also.

Okay. Can you quantify how much year on year in 26 and 27?

Thank you.

In 27, because of the new equipment moving in and the new fab, we need to recalculate in detail later on. Regarding the 2026, it's lower than 2025, maybe 10% around.

Oh, okay. So 10% decline in 26?

Yeah.

Great. We will ask other questions in second round.

Thank you.

The line is open now. Great.

Congratulations, Dr. Lee and Joseph.

Great result, right? The key contributor, obviously the ASP strength for two consecutive quarters.

So 40% up last quarter, the Q3, and then another 30% up this quarter. What's the next?

Any rough idea the price trend these days for Q1, Q2 for 2026?

That's a tough question. Yeah.

The reason why the price went up from Q3 and Q4 substantially, one of the key reasons is the price when it started to recover is already way, way very low, okay? I mentioned that a couple of times to many gentlemen here, is that because of the price downturn since 2023, actually 2022, 2022, 23, and into 2024.

And 2024, by the time of HVM, middle of 2024, by the time of HVM becoming good, HVM pricing recovered quite nicely. The rest of the market, other than HBM, which is over 90% of the product, continued to go down until middle of 2025.

Which means that ASP-wise, for this 90% of product that we've been talking about, has been going down in pricing for almost three years, okay? It's at a very low point, start to climb.

You see that very significant improvement on Q3 and Q4, okay? On top of that is that, of course, this is all driven by demand and supply, okay?

Moving on from here, we are seeing the price in Q1 may continue to improve. As of to which extent of it going to be improved, we cannot be describing that now, because there are only a few couple months to go, okay?

Based on the long-term contract, we can see that the price will be uptrend in Q1 as well, okay? Likely will be some exceeding 10% at least, okay?

Price uptrend.

Compared to the December quarter, right?

Yeah. Could be in the 20% approximately, yeah.

Again, it depends on two more months before we can be sure of what is the actual percentage on Q1.

As you pointed out, U.S. big tech companies, they are buying HBM on annual contract basis, but not sure for the overall conventional memory.

Any rough idea for your sales? What percentage for annual or multiple-year based contract versus quarterly versus monthly, or a little bit spot trading, or any rough idea?

Maybe December quarter revenue mix?

For multiple-year, the deal is very limited, very small number. As the market uptrend increasing, we're seeing the quarterly deal become more, okay?

However, I cannot give you a specific number, because this is very much on each case by case negotiation, okay? We still have quite a few percentages relying on month by month.

You are saying consumer side, the percentage of month by month is still higher than quarterly?

Consumer more monthly, but non-consumer still quarterly?

That's still percentage-wise, yeah.

Not yet many annual multiple-year contracts with auto OEMs or some industrial guys?

That is, of course, case by case, could be treated differently. Just speaking, yearly or multiple-year is limited.

Yeah. Very quickly, today you mentioned the new equipment moving in for the new fab early 2027.

That means your shell fab is already there, infrastructure, power, water also already there. To be done through this year, the new fab?

New fab, the power and water are already pre-arranged,

okay? If you fill out the new shell fab, what's the total wafer capacity there?

70K possible, or just 50K?

The new fab will be 45K wafer months, and our first phase is targeted for 15K to 20K per month.

You must have at least one EUV layer, EUV will be there, right? For the first time?

No. Our new fab will start to manufacture with our 1B, 1C, and 1D, second, third, and fourth generation of the self-developed 10 nanometer process technology.

That we are sure we do not need EUV. Although we are developing EUV technology as we speak, using current generation to do the work, okay?

We have proven that we can do it, okay? The measure is that when it's suitable for us to bring the equipment to produce.

There was a question from some investors, they are asking to Joseph CFO whether you are considering dividend payment with a very good second half result, and then another investor question is whether you can break down your revenue, DDR3 versus DDR4 and a little bit DDR5? Thank you, sir.

Appreciate.

Let me do that. Okay.

Regarding the product ratio, right now we are more focused on the DDR4, and the low-power DDR4 is the major. The DDR5, we will keep the running ratio around 10%, or a little bit higher, and the remaining will be the DDR3 as well.

That's the product mix. Regarding the dividend payout ratio, our guidance is 50% around.

We will depend on our shareholders' hoping, and we will propose to the board meeting and get the final approval.

Do you mean 5-0, 50% of the maybe?

45 to 55 is our guidance, general guidance. For

even for the 2025 results?

That we are still trying to figure it out, okay? Could be a little more on the upside, or we are still discussing on that, okay?

The important point in that statement is that as we going to be building a new fab, we're going to be spending a lot of money in the construction as well as the equipment for the future, okay? Likely we will be preserving some cash next year, but this year could be a little bit more favorable for distribution.

Yeah.

The market is already getting bigger, investors should be happy. I'm joking, but very quickly, Dr.

Lee. You are saying DDR5 portion is only 10% or a little bit higher in Q4 sales, DDR5?

Yes, 10%. Yeah.

DDR3 maybe around 40%? 20?

20%,

yeah.

The rest, around near 70%, is LPDDR5 or regular DDR5, or together, right?

LPDDR4 and low-power DDR4.

DDR3, 20%, DDR4 should be what percentage? DDR4 only?

DDR4 plus low-power DDR4, around 70%.

70%. Makes sense.

So 10% for DDR5, DDR3 20%, the rest, 70%, should be the DDR4. These are revenue basis, right?

That's include in DDR4 and low-power DDR4.

This is revenue basis, right? That's shipment basis.

Oh, shipment basis? That's shipment basis.

DDR3 price premium very high, DDR3 revenue portion should be much higher than this then.

This is DDR5 is a strategic product and technology that we have to move along, prepare for the future. Okay?

That's we like to grow DDR5 if the market is favorable, okay? DDR3 is more of the residual legacy consumer supply.

All clear, sir. Thank you very much, Dr.

Lee and Joseph. Appreciate it.

Thank you.

Thank you, Dr. Lee, for having the opportunity to ask a question.

I'd just like to ask, building up on Purvis, the question about the DDR5 mix. You said it's around 10%, and I believe the pricing for probably DDR4 on average is currently higher than that of DDR5.

Does it mean with also your stronger DDR4 probably mix will be largely unchanged throughout 2026? Or do you have any specific target by year 2026 that you are targeting?

That's my first question. Also second question, it's been a while since the DDR4 pricing momentum has been stronger than that of DDR5.

By when do you expect the DDR4 pricing to increase momentum to be still stronger than that of DDR5? Any guesstimate or any range of probably price increase between the two for the first quarter, as you pointed out, it would be roughly 20% plus-minus range?

Thank you.

Your question is comparing between DDR4 and DDR5 in the ASP, and we see that DDR5 pricing also improved quite substantially for the past few months. Okay?

As I indicated, DDR5 is a strategic product and process development that we will continue to pay attention to, and we like to grow DDR5 if market is favorable, okay? On top of that is for DDR4, we continue to support our customer, and that's the best that we can do, okay?

If anything possible is that we can reduce the DDR3 if the market size shrinks to a certain degree, okay? Overall speaking, we see that the market is tight on all market, okay?

DDR5, DDR4, low-power DDR4, and also DDR3 for now, okay? The pricing will very much depend on individual demand and supply, sector, product portfolio, basic product mix, okay?

Our strategy is continue to support our customer, even though the margin may vary from one side to the other side somehow, but strategically our goal is to make profit, but as well as making sure that our key customer requirement is fulfilled.

If I may, just one follow-up question, then would you be able to share the key considerations of the product mix strategy between the DDR4 LPDDR4 and DDR5? Can we safely assume the mix will be largely unchanged throughout 2026, or do you still put DDR5 as a strategic product to increase the shipment mix?

As I say, we'd like to maintain at least 10% or more. If there is a chance to grow DDR5, we will grow DDR5, and hopefully it's at the expense of DDR3 instead of DDR4.

Clear. Thank you.

Thanks for taking my follow-up question. Dr.

Lee, you mentioned about you will grow DDR5 mix if the market is favorable, right? I guess two-part question.

Is when do you think this DDR4 upcycle will peak? Secondly, I want to get your opinion about the DDR5 supply, especially Micron seems to sign a contract to Powerchip's fab to the future DRAM production, likely DDR5, right?

What do you think about the DDR4 and DDR5 cycle in the coming two years?

Yeah. I think your question about the news on Micron and Powerchip deal, and I think that's quite normal, okay?

Historically in DRAM industry, there's always partnership, always consolidation as well, okay? In the market looking for partnership, developing new business opportunity, that's quite normal, okay?

One topic is that requires some time to build a new facility, new equipment, new capacity. That requires some time, okay?

Also the initial cost for that is pretty high, okay? That's a factor if we factor that in, DDR4 or DDR5 supply may not be substantially changed, okay?

For next at least one and a half or even two years. Okay.

Okay,

Thanks. My next question is a little bit harsh because I feel like you honor all those...

Well,

if it's harsh, I will excuse. Okay,

let me try to be more modest. Anyway, because I feel your industry peers, they try to monetize to maximize their profits as much as they can.

Because given the down cycle, customers are, I don't want to save you, right? It's your own industry problem.

This is one out of five years or even ten years, right? They can finally receive back all the investments.

Based on your answers to your questions beforehand, you don't want to change the price negotiation behavior. Do you think you underestimate your pricing power?

Your earning power may not be as great as other DRAM players in this super cycle.

I think, to be fair, Charlie, is that for the last 13 years, 13 years, Nanya has made profit for 11. Okay.

We lose money on 2023 and 2024. Okay.

If you go back, you find that the major supplier also suffered a lot on 2023 as well. Okay.

Overall speaking that Nanya is doing okay. Okay.

Even though we suffered quite a bit on 2024 when the market recovered with HBM and DDR5, okay, and we are behind on that. Okay.

To be fair, I think that we need to improve ourselves instead of complain on the market or on the demand and supply. Okay.

From a profit point of view, of course we are looking for profit for sure. Okay.

By saying that we want to meet customer requirements also, that's important because customer is the one who buy our product, and that's the opportunity for us to do business and working together to gain profit. Customer gain profit, we gain profit as well.

Okay. I don't think your question is too harsh, I answered directly without asking Joseph to answer.

Okay. That's great.

Just some feedback, right? I think industry average price hike could be 50% to 60% in 1Q, based on what your industry peers' quotation.

I wanted to clarify: when you said the 20% price hike, that referred to fourth quarter, not 1Q, right? 1Q you have already came out with the price hike magnitude, right?

There are so many product portfolio, okay? I saw some of your reports, actually you cannot take one product's number and make it across the board, okay?

For instance, we're doing DDR5, we're also doing DDR3, and for customer need, we're doing some low-power DDR4. Some is very profitable, some is not as profitable as well, okay?

For generality, if you take one number and bring it across the board, your number will be falsifying the reality that we may be able to deliver. I just to remind you when you're doing the model, you need to take into account all the product portfolio.

Okay. that's fair.

Again, to clarify, the 20% hike you were referring to last quarter, not the current quarter, right?

The 20% price minus I'm referring to Q1 this year, okay? Maybe that will be a slightly plus or minus situation.

I would say mostly will be more than 20% plus instead of 20% minus, most possibility.

Sure. I think your pricing strategy will continue into 2Q, right?

... We will.

As I described, we will keep our pricing strategy. We don't want to, too much opportunities.

We need to work with our customer on their need, okay?

I respect, and thanks for your guidance on how we should do the real assumption for price ASP. Lastly, as we ask, every quarter about your wafer-on-wafer, this AI opportunity, can you provide more details

Again? That's a very good question.

As I described, that our third generation, fourth generation development on the process and product is going on schedule. Is our customer-made AI projects.

That's going on well, and actually it's a little bit ahead of our schedule. Originally, I expected the second half this year we may be generate revenue.

Likely we will be generating revenue first half this year.

Again, it's both cloud and edge AI?

Yes, cloud and edge AI, depends on customers' application. For that is customer confidentiality, and I cannot comment more.

Let me try, and if you don't feel comfortable to comment, then we can skip. Because smartphone and also human role are very important future HAI market, right?

Which one or both do you think you have potential opportunity?

I would say both cloud, phone, and also even smart notebook, smart PC, they will gradually increase their AI environment, okay? In longer future, you will start to see that AI move into automotive, okay?

As well as robotic, all have wonderful AI application.

That's great. Thanks, Dr.

Lee. Thanks, Joseph.

Thank you, Charlie.

Thank you.

Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN and Head of APAC Technology, UBS): Thanks for taking my follow-up. Could you confirm to us when you'll be starting mass production for 1C nanometer?

I think you are starting to piloting on 1D nanometer in the first half of this year? Is that still the case?

Thank you.

1C we're targeting by the end of this year, we should be able to start our qualification. We are targeting for the end of this year.

Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN

and Head of APAC Technology, UBS): How about 1D for piloting? 1D, we already fully production.

No, no, 1D, 1D, next one. 1D, maybe one year beyond for qualification.

Yeah. Nicolas Gaudois (Managing Director, Equity Research, Head of Research, ASEAN and Head of APAC Technology, UBS):

Okay. Thank you very much.

Yeah. Next question.

Thank you. Just one last quick question, if you don't mind.

The Nanya Tech have talked about the 16-gigabit DDR4 monodie with a very long life cycle for a while from consumer side. Are you still seeing the trends continue, or is there any trends of a customer migrating to DDR5, or given probably the very tight market, customers have no preference and trying to still secure as many DDR4s as possible?

Thank you.

Yes, there are customers plan to move from 16-gigabit DDR4 to DDR5, but also there are customers decided to stay in DDR4. That's also true for low power.

We're seeing that the demand for 16-gigabit DDR4 and 16-gigabit low-power DDR4 are pretty strong. Nanya is preparing to do some sampling toward the end of this first half of this year.

Thank you.

Okay. Now can we move into online question?

We have online question from KGI Securities, Michael Shen. He has two questions.

His first question is, We have observed a meaningful improvement of variable cost per bit in Q4 compared to previous quarter, and he would like to ask, what is the reason? Basically our cost has been coming down, Q4 versus Q3, in depreciation.

Q2 Q depreciation-wise is coming down by almost 20%, and moving on, as Joseph just described, moving on from now, maybe 10%. Depreciation is a key, and also product mix, and also other minor cost reduction as well.

Second question is regarding to the news about Micron transferring process technology to one of the DRAM peers. Then do you believe this could have impact on the supply-demand dynamics of DDR4 and low-power DDR4?

If so, at what point in time might such effect begin? Additionally, given that the competitor has so its fab, but may receive Micron's process technology, how do you view potential implications of competitive landscape of wafer-to-wafer going forward?

I guess it's not suitable for me to comment too much on the competitor or the previous partner, their business actions. However, I could share from our own experience.

As I described just now, history in DRAM industry, there are many cycles of partnership as well as consolidation back and forth. Nanya do have experience working with three partners, including IBM, including Infineon, including Qimonda, and including Micron.

Personally, I have been deeply involved with all these projects, okay. All these projects from Nanya's side, we are seeing that it's going to take time.

It's going to take cost, take money to build the capability, okay. Thankfully, because of that, we're seeing the impact maybe one and a half to two years from now.

Then we have the next question from Capital Securities by Diane. Chen, okay.

The question is: what is the current yield ramp-up status of the 1B process, and what is the target shipment contribution for 26? Our 1B is already in full production, okay, and yield is already pretty reasonable at a pretty high range, okay.

Our target shipment will be around 40% of output shipment. We're looking for that percentage.

With the industrial-wide shift of capacity toward HBM, how is Nanya Tech capitalize the resulting supply shortage on DDR4 market? To answer your question, Nanya is on two fronts, okay.

First, we're not totally give up on HBM. We are working with our customer on what we call customer-made AI project.

That's going on well, okay. Second, Nanya has been optimizing our capacity and delivery to DDR4 as well as low-power DDR4 market, as we just described past few minutes.

Your question three is: what is the projected revenue mix for DDR5 by the end of 2025? How will this impact the overall branded average selling price?

I also commented that on my previous answer to the question is that DDR5 is Nanya's strategic product line that we will continue to support and develop. If we see opportunity to increase our contribution to DDR5 market, we will do so, okay.

Overall speaking, we are looking for at least 10% or more. Yes, it may be impacting somehow on DDR overall ASP.

However, DDR5 pricing also improved substantially over the past few months. Your question four is regarding to customized HBM strategy, what is the status of cooperation with the ecosystem partner for AI and automotive application?

Our partner decide their application, either it's going to be in the cloud, or in edge, in PC or mobile phone, or any other automotive. Our customer decide that.

Okay. Far, that has been going on well.

As I said, it's ahead of my previous expectation. Originally, I was expecting that second half this year may start to generate some revenue.

It looks like it's ahead of schedule. We would be generating revenue in the first half this year.

Your question five, well, long list. What is the 2026 CAPEX for new fab equipment move-in?

2026 CAPEX, as I described, will be 30% out of our total CAPEX of 50 billion NT dollars targeted. Your question six: given the return to profitability, what is the board current stance on 2026 dividend policy?

If we're talking about earnings from 2025, okay? Likely will be a little different from earnings from 2026.

For 2025, first of all, our general guidance is between 45% to 55% of our earnings, okay? As the general guidance for 2025, we may be looking for higher percentage.

For 2026 earnings, we're looking for lower percentage to preserve cash for our future CAPEX requirement for new fab. The next question is from Yuanta Securities by Michael Hsu.

You have four questions, okay? Let me quickly answer one by one.

Has the DDR4 16 gigabit started ship to clients? No.

We target to ship toward the end of the first half. Any update on mass production schedule about wafer to wafer?

Yes, we have moving equipment, and we are doing early engineering setup, and that is going on on schedule very well. Your question three: have company signed LTA?

If so, what percentage of capacity booking for LTA? Yes, we signed LTA.

However, I cannot give you the precise percentage of LTA, and this will discuss case by case as needed. Question four is financing plan for 2026 and 2027.

Looks like launching debt or new shares? Both are possible.

Looking into our current net cash situation is that by the end of 2025, we had net cash of around 1 billion, more than 1 billion U.S. dollars, and we are looking for by the end of this year, 2026, we will be generating another 2 billion from Nanya's net cash point of view.

Likely we will have around 3 billion of net cash by the end of this year. With that, we have this large percentage of what we need for building a new fab first phase.

However, we will continue to consider debt and new share, okay, and that will be arranged in the future. With that, the end of all questions.

Thank you so much for your questions and comments.

Thank you. Thank you for your support.