ladies and gentlemen, welcome to Nanya Technology Q1 investor conference. I'm Pei-Ing Lee.

Today's presentation include Q1 '26 revenue and results, capex and bit shipment, market outlook, and business review and outlook. I may have a little more material to share with you in today's presentation later on.

First start with financial results summary. Our Q1 '26 net sales comes to NT$49.087 billion versus Q4 last year NT$30.094 billion, Q-to-Q up by 63.1%.

Gross profit and gross margin comes to NT$33.316 billion at 67.9% in Q1 versus Q4 last year NT$14.759 billion at margin of 49%. Operating income, NT$30.111 billion at operating margin of 61.3% versus Q4 last year NT$11.781 billion at 39.1%.

The non-operating income, NT$1.607 billion, and income tax expense at NT$5.66 billion. The net income for Q1 comes to NT$26.058 billion at net margin of 53.1% versus Q4 last year NT$11.092 billion at margin of 36.9%.

For the earning for the quarter, $8.41 per share versus Q4 last year $3.58. The book value comes to $62.25 per share versus Q4 last year $54.99 per share.

Quarterly revenue and results summary: revenue Q-to-Q up by 63%, year-to-year up by 582.9%. For ASP, increase by over 70% Q-to-Q, and year-to-year increase by over 200%.

For shipment, Q-to-Q down by mid-single digit, and year-to-year up by more than 100%. For exchange rate, we've seen low-single digit favorable, and year-to-year unfavorable mid-single digit.

For the Q1 '26 results comparison, net sales NT$49.087 billion versus NT$30.094 billion, up by 63%, and the result is due to ASP increase by over 70%, bit shipment decrease by mid-single digit, and exchange rate favorable by low-single digit. Gross profit NT$33.316 billion versus NT$14.759 billion, margin is 67.9% versus 49%, and gross profit increased by NT$18.6 billion, mainly due to higher ASP.

For operating expense, NT$3.205 billion versus Q4 last year NT$2.979 billion, it's marginally increasing. For operating income, NT$30.111 billion at operating margin of 61.3% versus Q4 last year NT$11.781 billion at margin of 39.1%.

Now, OP income increased by NT$18.3 billion, mostly due to higher ASP. Net income NT$26.058 billion at net margin of 53.1% compared to Q4 last year NT$11.092 billion at margin of 36.9%.

Net margin increased NT$15 billion, and the difference between the OP margin and net margin mostly due to income tax expense, NT$3.4 billion unfavorable. SG&A expense for Q1 this year, NT$1.096 billion, and we're seeing SG&A increasing in Q4 last year and also in Q1 this year, mostly due to employee bonus plan.

Then for right-hand side, the R&D expense also increasing from Q1, Q2, Q3 last year to Q4 NT$2.127 billion and at Q1 this year NT$2.109 billion, and mostly also due to employee bonus plan. For cash flow, beginning balance for Q1, NT$58.074 billion, and with the cash from operating activities NT$31.287 billion and capital expenditure NT$2.809 billion, and financial activity also minus NT$533 million, the net end balance at NT$86.019 billion, with free cash flow of NT$28.478 billion.

This dollars come down to the note underneath of this page: our net cash comes to NT$68.2 billion. The net cash means that our cash equivalent NT$86.0 billion minus the debt of NT$17.8 billion.

The net cash NT$68.2 billion is exclude the private placement that happened in April, which comes to NT$78.7 billion. This chart here shows Nanya's performance in net income over past 13 years plus Q1 '26.

As indicated here, over the past 13 year that Nanya has been profitable in 11 years. With the Q1 this year, NT$26.1 billion net income compared to the two years of loss, 2023 and 2024, in the Q1 we are very much compensated the loss happened in 2023 and 2024.

On the bottom chart here shows Nanya net cash. Net cash means that our cash minus debts.

From the beginning of 2013 at minus NT$71.3 billion comes to at the end of Q1 at NT$68.2 billion positive. This is an encourage trend, and we are expected to self-fund our new fab construction.

For capex and bit shipment: on the left-hand side of the chart, our capex was NT$13.4 billion in 2025, and 2026 in Q1 capex is NT$2.8 billion. However, for the year 2026, we expect capex up to NT$52 billion.

Within those NT$52 billion will be around 30% for wafer equipment and 70% mostly for cleanroom, construction, and facility for our new fab. On the right-hand side of the chart, bit shipment: in 2025, our bit shipment up by 50%.

In Q1 this year, our bit shipment was down by mid-single digit. We've seen our inventory level becoming healthy.

In 2026, the whole year, we target to have around 15% year-to-year growth versus 2025. For market outlook: in general, AI-driven CSP capex has supported strong cloud DRAM demand, that's including HBM, RDIMM, and LPDDR5.

On the other hand, constrained DDR5, DDR4, LPDDR4, and DDR3 supply is due to legacy DRAM end of life. We are expecting training and inference may trigger more customized edge AI applications.

From the supply side, in 2026, we see marginal new capacity introduced by industry, which is more focus on high-end CSP and value-added demand. From demand side, AI has driven overall DRAM demand: HBM, high-density RDIMM, and LPDDR5 leads to overall DRAM demand.

We've seen strong DDR4, LPDDR4, DDR5 demand for high-end SSD, BMC, and NICs. For conventional high-end PC and mobile demand for DDR5 and LPDDR5 remain consistent.

Others means that the consumer side, we still see strong consumer demand for high-ticket items. For the smaller ticket item, demand slowing down.

However, smaller ticket item, in general, is already small share of DRAM consumption to start with. The overall demand remain strong, healthy, and sustainable.

For business review and outlook: Nanya just completed our private placement. Update for private placement is that four of our major customer participate in Nanya's private placement.

We have make announcement in MOPS on March 25. The total proceeds of NT$78.72 billion, which means 10% to 19% ownership of the private placement, also announce in MOPS April 8.

For the supply agreement, including civil supply of multiple product mix. Why we doing private placement?

We strengthen Nanya and our customers' partnership. Second, we build up with customer a win-win position in AI and CSP supply chain, that's including SSD, networking.

Also with the cash injection to Nanya new fab enhancing Nanya's DRAM supply. For Nanya-specific, we position ourselves in the AI value chain.

For the financial update and outlook: in 2025, we have a profit of NT$6.61 billion, EPS $2.13 per share for the whole year. Our board has approved a dividend of distributing NT$4.65 billion at approximately $1.35 per share.

This is based on 3.5 billion shares outstanding after private placement. In Q1 '26, Nanya make a profit of NT$26.06 billion and at EPS of $8.41 per share.

In Q1 '26, gross margin at 67.9% and net margin at 53.1%. For Q2 '26, we are expecting further improve beyond Q1.

We are expecting high gross margin is sustainable in the next few quarters. For operation update and outlook: Nanya DDR5 contribute to our 10% revenue.

However, it's flexible to increase if needed. Based on our supply agreement, likely the percentage will be increasing for the coming quarters.

For DDR4, LPDDR4, we are serving industry-wide supply gap. Also for customized AI ultra-wide IO memory is starting to contribute initial revenue.

It's a small percentage, but it's already contributing initial revenue. Our new fab construction on schedule, and target equipment move-in in Q1 next year.

For our third-generation 1C and fourth-generation 1D and EUV development are on schedules. For ESG recognition, for the last quarter, we are selected as Top 100 Innovation by Clarivate on the fourth consecutive years.

Now, we may move on to question and answer section. Yes,

Thank you, and hi, Dr. Lee.

Congratulations for a very strong result. Your gross margin is amazingly high.

I have a two questions first. Is about over the past three months do you see faster ASP price hike?

Because I remember three months ago the guidance was quite conservative, right, like 20% Q-on-Q price hike, but I think the implied ASP increase should be much more than that. Also you talk about the future trends, right, I'm not sure if you noticed the recent spot market dynamic.

It seems like your outlook is very bullish, but spot market is suggesting otherwise. Can you comment on the price trend in first quarter and 2Q?

Thank you.

I think your first question about ASP for the past month was quite encouraging for the supplier, and the margin is also, in general, very very promising for the supplier as well, okay. Most importantly, we've seen the margin is sustainable.

As of your question about the last quarter, in Q4 last year, I commented like 20% ASP. Yes, true.

At that time, I only seen one month, okay? Maybe that was my short sight or my misunderstanding of your question.

Your second comment is on stock market. I suspect the stock market is mostly related to DRAM stock market or general overall stock market, okay?

I cannot be expert in a stock market. I think you are, okay?

You're pretty much the stock market expert, okay? Regarding to the stock market was impacted by overall there's a Middle East geopolitical issue, okay?

There's an energy-related issue, okay, overall the impact on global economics. In general, because of AI in specifically require DRAM as a critical component, and the AI development has been continue to be quite encouraging.

That's the result of the DRAM market been continue to be quite healthy, okay? As of the stock market specific for DRAM, I think that your influence probably more than mine.

No, I didn't mean to influence the market, we just share what we are seeing on the supply side, demand side, and pricing side. Dr.

Lee, actually, I was asking about spot price, the—

Oh, okay. I am sorry.

—yeah, but

it was also very helpful to get some color on the capital market feedback. We'd like to ask, thanks for saving one question for me.

Okay. Spot ASP, recently there are some fluctuation on the spot ASP.

I'm sorry I misunderstood your question. Okay.

The—

No, we care spot market as well, don't get me wrong.

We really care about— I heard stock market, but I didn't know you mean spot market, okay? The spot market is a small percentage of overall market, quite small, okay?

Actually, as the AI increasing, the spot market even getting smaller, okay? That's first point.

Second of all, spot market, there's a lot of fluctuation due to there's a lot of leverage in the spot market happening by certain players. Put as an example: in general speaking, you may be seeing one product in the general market, okay—general market means that in the normal market other than spot—you may be seeing a product selling say supposedly $20 or so, but the spot may be already jack it up to $45 or even $50, which is quite outlier compared to the general market, okay?

As a result, when the outlier making certain adjustment due to certain reason, okay—they may have sufficient inventory or whatever reason, we don't know, okay—the price may be drop all of a sudden by 30%. You figure that $45, $50 down by 30%, what is it?

Still $30-something compared to regular around $20. I'm just giving you a general example, okay?

That's the reason why spot market is fluctuating overall speaking. More importantly is that I just mentioned that spot market by itself is small percentage of overall market.

In general speaking, other than spot market, the demand is still quite healthy and also quite sustainable.

Right. Dr.

Lee, if I may follow this spot market dynamic, I think when this so-called supercycle began last year, right, spot market price hike was a very good leading indicator. I'm not saying it's kind of accounts for a big part of demand, right?

I'm just saying that it could tell us something, especially recently we see China smartphone shipment is tracking much below expectations for some China brands like Transsion. I think their smartphone shipment probably down 35% year-on-year.

I'm not sure if we should associate this spot price correction to weaker demand.

Okay. I think I commented in my presentation also, we've seen that small-ticket item, which means that where your BOM cost percentage is high, those small-ticket item may get influence, okay?

As I say, those area is important, but it's still relatively small percentage in terms of consumption, okay? That's including small item, low-end whatever it is, okay, they will start to see some pressure in the BOM cost, okay?

Those adjustment, as it's making some adjustment already, okay? Overall speaking, more important is overall demand and supply-demand balance.

We don't see that to be overshooting or undershooting influence the overall market substantially.

Thank you. Dr.

Lee, my second question is about the LTA coverage, right, because we can understand that for eSSD, networking, or AI-related, and it's going to be very very strong, right, in the coming maybe 5 years, 10 years. Can we get more details about how much of your for example 2027, 2028 business can be covered by this LTA contracts?

In

in general speaking, we are trying to partner with our our customer, okay, to help their business development. At the moment, their business development are in the high-end side, as as I indicated just now, okay, in the SSD, in the networking, in the BMC, NIC, those area, okay?

That's that's in general what what we intend to help our customer making development. However, LTA coverage will cover overall speaking what is our customer's demand and the product portfolio that we offer to them, including not just that, of course, I I mentioned that it may include DDR5, LPDDR5, DDR4, LPDDR4, DDR3, RDIMM, SODIMM, you name it, SODIMM with ECC, all kind of different product portfolio.

Nanya currently offer to the market around more than 40 product portfolio concurrently, okay? Those product will continue to serve our customer in long term, plus we are also developing new technology, process technology, and new product technology to be offered.

That will come that will combine with the current 40 40-plus product portfolio in the next few years. Right.

Is there any percentage of your business can be covered by LTA?

We in general try to basically formulate our business including long-term LTA, middle-term LTA, okay, short-term LTA, and also monthly deal. We'd like to have a combination of all of those together, okay?

For reason that some of our business is committed, okay, some of our business that we also need to take care of the eco-cycle in the overall DRAM supply and demand industry, okay? Making sure that our customer had sufficient DRAM supply, however, not to have extra to put in the inventory while the other customer may not have sufficient supply and have a line-down situation.

We try to do our best. We cannot do everything perfectly well, but we try to do our best to make the industry more healthier.

Got you. I will be back to the queue.

Thank you, Dr. Lee.

Yes, thank you very much. Congratulations, Dr.

Lee, great results. The question should be, I think you must be very happy with a very high margin, but you have pointed today you may raise the price further.

How you going to manage some customer resistance to the further leverage price hike, meanwhile, your gross margin, OP margin already record-high? How about if you just make the memory price very stable for the customer rather than increasing further and further?

This is a good question. Actually, margin is already high, and of course we will be doing our ASP according to fair market price, okay?

Of course, we will discuss with our customer on fair market price case by case, okay, and day by day also, okay? The buyer and suppliers discussion and negotiation has always been happening, even it's a down market, not so market, or it's an up market, it's always happening day by day, okay?

At the end, we are looking forward to have a fair market price to our customer. That's the most important, we also see in the concern of our customer as well.

Our customer also seen our concern on the fairness as well.

You mean still there are many customers who need the DDR4, even DDR3, but your customers are competing each other among themselves, some customers acting in accepting higher price then you can sell the product for those customers? As long as the shortage continues, maybe you can raise the price?

In general speaking, Simon, I cannot comment specifically on one customer versus the other, one product versus the other. In general, this is the fair market discussion throughout all the time, okay?

Not only now, but also in the past, okay? That's a general situation.

Your point about the high margin and maybe customer resist, and that's always happen now, even at a very very low margin, customer also resist to be accepting the price as always, okay?

Yeah. You think, sir, the ASP second quarter still will increase quite meaningfully quarter-on-quarter basis as a industry trend?

Yes, that's the expectation. Also the confidence level for that is relatively high.

Even usually the September quarter peak season, and then December quarter still okay. The industry trend-wise, do you see a further upside, some room to see the price increase September quarter, December quarter?

That's more so of a seasonality topic, okay? Seasonality could be related to two important thing.

Is a consumer consumption seasonality, and also it all depends on major company like enterprise, their budgeting, okay, their spending by quarters, okay? That's could be different from one company to the other company.

That's general seasonality, okay?

Yeah. Oh, very quickly, you already mentioned the LTA, but do you think a quite significant portion of your sales with the LTA or still small portion, or maybe your customers already get committed for some volume, but the price still mostly negotiating monthly or quarterly basis?

Maybe would you recap the definition of LTA in terms of the volume and in terms of the price and then time horizon, just roughly?

For LTA, we will be supporting our private placement subscriber, our partner on that, as well as our existing LTA, will continue to support existing LTA, okay? The LTA percentage would not be covering 100% of Nanya's supply, okay?

We will try to, as I say very beginning, have a long-term LTA, middle-term LTA, and a 3 months LTA, and even monthly price and deliver, okay? That's going to be continue to be Nanya policy, okay?

To be sure, we will making sure that our supply agreement and LTA is fulfilled as much as we can, okay?

Your agreement is more like a one-year, two-year, three-year long commitment, meanwhile, price can be changed monthly, quarterly basis?

That's could be different customer by customer, okay?

Okay. The SSD case, again, you are currently selling the DDR4, right, for the eSSD customers?

Both DDR4, DDR5, they're both, okay? Oh,

it is called for buffer memory or cache memory for SSD solutions?

Customer's solution, whatever they want for the cloud.

Yeah. Thank you, sir.

Maybe, yeah, I stop here for now, and then I will get back to you.

One point, Simon, you ask question before about employee bonus, okay? I'd like to take this opportunity to share with you on the employee bonus plan.

Also the shareholder return policy, because if you pay lots of special bonus, maybe you are

worried

for the dividend could be squeeze.

I'd like to make a couple comment on that at this point. Employee bonus has been top priority for my presidency, okay?

For the last 13 years, we have make profit for 11, okay? For all the profitable year, we have distributed not only yearly bonus, but also quarterly bonus to our employee, okay?

Even with those two years that we are not making profit out of 13, we still try to do performance-based bonus for the employee, okay? I'd like to emphasize that we are trying to share bonus with our employee.

You have already provisioned the bonus expenses within Q1 result?

Yes. Oh,

okay. Then, yeah, we don't have to worry about any margin squeeze.

It's already considered.

Yeah. Glad to hear your confirmation dividend payment based on the 2025 results.

Would you recap maybe your target payout ratio, 50%, 60%?

You mean the dividend, okay? The dividend, again, this is subject to board approval, okay?

In general, we will measure the market situation and our cash requirement, okay, and all our also shareholders consideration, everything together, okay? We will discuss in the upcoming board and shareholder meeting as well, okay?

For instance, for the last year, we are distributing higher percentage, but likely for this year we may be distributing less percentage because our need to our new fab construction and also to build up our future development.

thanks for taking my follow-up question. First question is also on the quarterly price.

Dr. Lee, can you provide some roughly range for 2Q contract price increase for DDR4?

Charlie, you won't give up on the numbers. I just mentioned that really that we've seen some remarkable price hike, and the margin will get higher in Q2, okay?

Yeah. Anyway, based on our calculation, right, if January price up 20%, February, March each also of 20%, I think the starting point for April is already very, very high.

I would say a quarterly price hike 40% to 50% is a current market's expectations. Is that too high or conservative?

Charlie, your guess is better than mine.

My guess is 40%. Do you think that's about right?

40%.

I think I'd better not putting a number in the market,

okay?

I will try to say few tens of percent,

okay?

Okay.

Okay? Sure.

Also on the supply side, right, anyway, in our research, we were a little worried about, for example, Korean supplier, they extend the EOL, end of life, of DDR4, and also China peer. Not sure if it's also the case you're seeing that they probably will add back some DDR4 capacity.

I know demand is very, very strong, but besides your customers signing LTA with you, do you think the customers are also trying to push other fabs to produce more DDR4 in the coming years?

My my answer to you, Charlie, our supply is not limited to DDR4 and not limited to low-power DDR4, is a wide scope of supply. I would like to share with you maybe—give an icon like that.

I would like to share with you, I don't know if you've seen on this on my on this presentation, okay? Basically, this presentation here, this chart here showing, first of all, Nanya net income on the top chart, okay?

A middle middle chart here shows Nanya sales in regions, okay? Over past more than 13 years, our sales into China customer has been in 20 percentage, plus minus 5% or so, okay?

Our sales to worldwide customer is around 80%, plus minus 5%, okay? All this sale is supported by LTA and monthly, okay, including worldwide sale and sale to China customer, okay?

The bottom chart here show you that China domestic supply, okay, including all other other supplier in China, is basically going up quite substantially over past 10 years or so, okay? What I mean is that if you look at this chart versus Nanya sale in region versus Nanya profitability, okay, it's really not not correlated, okay?

It's really not correlated. On top of that, I want to indicate one year, which is 2023, which is the worst year for Nanya performance.

That year, Nanya lost NT$7.4 billion. On the same on the same year, the worldwide companies lost between NT$180 billion to NT$340 billion, which means that if there's any impact, any correlation, okay, with what you've just been concerned with China domestic supply, it's not limited to Nanya, okay?

If you look at this chart, you found that it's really not direct correlation with Nanya performance, it's not even direct correlation with worldwide companies supply, okay? I'd like to give you this information in what's been happening in over the past 13 years, okay?

Then. Because I think memory or DDR4 is still kind of commodity, which is sensitive to incremental demand and supply dynamics, right?

My question was very direct about whether you're seeing the DDR4 supply is growing. I'm not saying two years later, I'm thinking about the coming six months.

DDR4 has various of DDR4. DDR4 is not just the small item used DDR4.

There are large-ticket item used DDR4, there are high-end used DDR4, there are communication used DDR4, there are RDIMM used DDR4, they're all kind of different DDR4, okay?

Their

DDR4 can be used for cloud, their DDR4 cannot be used for cloud, okay? In general, you cannot take it one DDR4 saying that that's everything is one story.

There's a lot of story behind DDR4. Even with the emphasis on DDR4, I believe that Nanya is capable of and flexible of switching our product to meet our high-end customer requirement, okay?

I also believe that DDR4 will continue on to serve many, many area for many, many years as well, even with more or less here adding more or less, okay? Important thing is there are different type of DDR4 for different applications.

Okay. Thanks, Dr.

Lee. I think I take that you have a big exposure to specialty market and there was a decoupling of your performance versus the China supply based on your analysis.

I take that. Switch gear back to LTA discussion.

Can we get more details, I'm referring to those LTA more than a year and especially for those strategic partners investors, are those the price negotiable, and are there any so-called prepayment in addition to the private placements for those LTA? Yes.

Charlie, I cannot share with you our agreement because under nondisclosure agreement that we have with our customer. I can share with you that we will treat our customer fairly, and also that would be also fair to Nanya.

That means that, in general speaking, we talking about fair market.

Okay. I think those are all my questions.

Thanks for your answers, Dr. Lee.

Thank you for your question, Charlie.

Thank you.

Thank you, Dr. Lee, for taking my question.

I just have one question. I'd like to ask you the sales application mix.

Could you share your sales from a server applications for last year, also Q1, and also enterprise SSD grade, the DDR4, DDR5 sales mix for 2025 and also Q1 '26? Thank you.

In general speaking, our share to cloud server, okay, that's RDIMM plus PC, is around 20% to 25%, okay? For the storage, which means SSD, is around 10% for now, but that percentage may increase, okay?

Then we have networking, it's around between 15% to 20% of networking. Networking means communication as well, okay?

Other than that is the rest, okay? The rest is general consumer.

Oh, one thing to mention that the automotive and industrial is about approximately 10%.

Just within the RDIMM and the PC, if as you said for the cloud and the computing in general, if exclude the PC portion, just looking at the RDIMM portion, then is it safe to say 10% to 15% range?

That will be changing as we speak, okay? I cannot share you the specific percentage on that, okay?

In general speaking, we are doing around 20% to 25% for server DIMM and PC combined, because it use the same product, mostly DDR4, mostly DDR5, and even DDR4.

Understood. Thank you.

Thank you.

Thanks again, Dr. Lee.

Very quickly for your new fab. You are saying new equipment for the new fab, the installment will start in Q1 2027.

That means the shell fab building mostly done already, will be done by the end of this year?

The structure is almost done already. Right now we are going through facility and cleanroom construction.

All right. Great.

Hopefully, we can visit there.

So 1B,

1C, 1D, 9s, DUV, right, multi-patterning basic?

The 1C, 1D, and EUV is under development. And 1C already have some beginning result.

So

1D should have EUV layer, EUV?

No. EUV layer has been exercised in many different generation, and we don't see that is a requirement for even 1D.

We will exercise it in 1D and or even 1C.

Without EUV.

With or without EUV.

Oh, okay. Then your capex budget for the new fab is mainly for the up to DUV level rather than EUV?

They are both, okay? We will have DUV facility and also EUV facility.

Yeah. Then, yeah, people still asking the helium and the bromine supply shortage, but when you run the today's fab in 3A, you don't see any gas shortage because of the Middle East issue?

You're talking about helium, right? In general speaking, the helium can be available other than Middle East, okay?

There are no immediately shortage issue yet. However, the price is increasing for sure.

Yeah. Then very, very quickly, sorry, a little bit confusion is your revenue mix.

Previously, I remember you said maybe more than 50% your revenue is consumer-related. Today, it sound already 20%, 25%—

No. Simon, sorry for misguiding you.

Our consumer is anything other than PC, server, and low power. Everything we put in consumer.

Today I commented on SSD, commented on auto, industrial, commented on networking, they are all in consumer in general speaking. Today, I just say more specifically on those area.

We lump it up in as a consumer.

Okay. Then the how about this way, sir: maybe let's start with easier application.

Server plus PC together, computing-related, again, the about 20% to 25% of your sales?

Plus minus, yes. 20% plus minus.

That's including PC and server, yes.

Okay. This portion includes the DRAM for SSD product or not?

No, not including SSD product, yeah.

The SSD market not so big, and the each SSD does not use relatively high amount of the DRAM. The DRAM for SSD, I'm still in very, very looking little of your revenue, no?

Actually, in general speaking, because of DRAM is helping NAND flash to perform well, especially in the cloud computation. That area becoming more and more important as AI development in the cloud today, but they may even go beyond that.

Yeah. Still less than 10% of your revenue, right?

The DRAM for SSD.

Today, for now. For now.

Yeah. It's very small, less than 10% of your revenue.

10% is very important for us. Yes.

There are some question online.

May I just— Good.

Yeah. May I just give the online question a little bit chance to ask?

Yes, please.

Sorry, Simon.

Okay. The first five questions from Yenda Michael.

The first question is, "DDR4 16Gb current qualification status, expect revenue contributing timing?" Currently the customer are basically try running our 16Gb DDR4, and we are expecting second half this year to have revenue.

Next. "What is the wafer-to-wafer validation progress, revenue timeline, and outlook for new customer this year?"

We are doing engineering run today for wafer-to-wafer validation, okay? Revenue-wise, we are expecting to be sometime next year.

Third question, "Any upcoming debts or equity financing? What is the target leverage ratio and allocation split between capex and R&D?"

I think I commented that in my presentation material on the capex as well as R&D from our budgeting point of view. Sorry, Q3, let me read through Q3.

Upcoming debts and equity financing, we just finished this round of private placement. For now, we don't need to raise the debt.

For the future equity financing, for now, we don't have a plan yet, but always there's some future possibility that we will take into consideration, but not for now, okay. Fourth question, "What is DDR5 projected shipment in mix and target market for 2027?"

This will be very much depends on our customer demand, and we are discussing this topic on ongoing. "What is your LTA negotiation process?

Will there be quarterly price reset or down payment requirement?" In general speaking, all the LTA is case-by-case different, okay?

It could be in general speaking, for quarterly, we will have a one quarter fixed pricing. The next question is from Capital Security by Lian Chan, two question.

First question is, "Is there a plan to pre-secure LTA for upcoming Fab 5 capacity?" Our LTA not only covering current 3A and 3A-N, also covering future fab, and we'll consider the whole capacity as a whole.

Question two, "For existing LTA, are they primarily fixed price or floating? Do this contract price include price renegotiation clause and to capture the upside during the current DRAM pricing?"

In general speaking, when the price is fixed in a agreement, in general, we will recognize that and our customer will recognize that, and we'll try not to make adjustment until the next cycle of negotiation. The next question coming from E.Sun Security by Connie Hsu.

His first question is, "Is there any strategic cooperation in AI storage with Sandisk, Kioxia, and Solidigm?" I commented on that already.

In general speaking, we are trying to use DRAM to help our customer able to engage in AI CSP application, also with in general AI application as well. A second question, "What is your view on CXMT capacity expansion and its impact to DDR4 pricing?"

I already commented that on previous Charlie's question and also added with one of my presentation foil. The next question, "Beyond weak demand, are you seeing OEM spec down or reduce DRAM content per device due to rising cost?"

In general speaking, small-ticket item and some ticket item already starting to have that happen, okay? That's including in my comment to the all view just now.

The next question coming from KGI Security, Michael Shen. The question is, "Nanya has raised over NT$70 billion through private placement.

After covering this year capex, along with strong earning growth, it looks like you should have a fairly solid cash position by next year. I know it might still be a bit early, but could you share some view on how you re-thinking about deploying this cash?

For example, would you consider further increasing capex and investment in R&D?" Yes, we're considering that.

"Should we view a large cash dividend payout as unlikely given this strong opportunity to narrow down technology gap with competitor?" Yes, we'll consider to also pay out to shareholder.

As of what percentage is reasonable, we will discuss with our shareholder and we will make that proposal in the next year's dividend distribution. Yes, Nanya also will reserve some cash for future growth as well.

With that, it's the end of the question online. Yes,

Thank you, and goodbye.