Leading manufacturers, including Samsung Electronics and SK Hynix, have significantly raised their first-quarter contract prices, with NAND flash supply prices increasing by over 100% and DRAM prices rising by 60%-70%. The core drivers of this memory price surge include explosive demand for HBM from AI servers, increased capital expenditure in data centers, and structural adjustments in production capacity. The supply-demand gap continues to widen, and this price increase cycle is projected to last until mid-2026. The current period marks a new starting point for the next cycle in the memory chip sector. With the rapid growth in AI server demand coupled with domestic substitution trends, investment opportunities for listed companies within the domestic memory industry chain are viewed favorably.
In January, the memory market continued the strong upward trend observed since the fourth quarter of 2025, with price increases for DRAM and NAND flash consistently exceeding expectations. The significant price hikes by leading manufacturers are primarily driven by the factors mentioned. The ongoing price increases are already having a notable impact on the downstream supply chain, putting cost pressure on consumer electronics terminal manufacturers. According to TrendForce data, global smartphone shipments are forecast to decline by 2% year-on-year in 2026, while first-quarter laptop shipments could decrease by 14.8%. Memory products account for 10%-20% of a smartphone's bill of materials cost, and rising costs will compel manufacturers to adjust product structures and pricing strategies.
Taiwan Semiconductor Manufacturing Company's (TSMC) fourth-quarter 2025 results far exceeded expectations, reaching a record high. Revenue was $33.73 billion, a 25.5% year-on-year increase and a 1.9% sequential increase, surpassing the upper end of the previous guidance range of $32.2-$33.4 billion. Net profit was approximately $16.3 billion, up 35% year-on-year and 11.8% sequentially. The gross margin reached 62.3%, an improvement of 3.3 percentage points year-on-year and 2.8 percentage points quarter-on-quarter, setting a new record. The operating profit margin was 54%, and the net profit margin was 48.3%, both significantly exceeding market expectations. Process structure optimization contributed, with advanced processes (7nm and below) accounting for 77% of revenue. Within this, 3nm constituted 28%, 5nm 35%, and 7nm 14%. The 3nm process entered high-volume manufacturing in Q4 2025 with good yield performance, serving as the core engine for revenue growth. Revenue from mature processes accounted for 23%, showing signs of a structural recovery.
Prices for passive components and analog products also increased in January, primarily driven by rising costs. A new wave of price hikes emerged in the passive components market. Leading manufacturers such as Yageo, Fenghua Advanced Technology, and Sunlord Electronics issued price adjustment notices, with increases generally ranging from 5% to 30%. These hikes are mainly driven by rising prices of raw materials like silver, copper, and tin, combined with growing demand from high-end sectors such as AI servers and new energy vehicles. Prices for products including MLCCs, inductors, and resistors have risen to varying degrees. Overseas giants like Analog Devices and Texas Instruments announced price increases of 10%-30% in January. Some domestic analog chip manufacturers have followed suit with adjustments. Reasons for the increases include rising wafer fabrication costs, strong demand for automotive-grade and industrial-grade chips, and tight 8-inch wafer capacity. As fundamental components of electronic systems, price increases for analog chips will be passed on to various downstream application fields.
Regarding investment targets, it is suggested to focus on relevant IC design companies such as Gigadevice Semiconductor (603986.SH), Puya Semiconductor (688766.SH), Dosin Semiconductor (688110.SH), Ingenic Semiconductor (300223.SZ), and Montage Technology (688008.SH), as well as memory module manufacturers like DMEGC (001309.SZ), Shannon Semiconductor (300475.SZ), and Longsys (301308.SZ). Attention is also advised for AI-related PCB companies, including Shengyi Technology (300476.SZ), Wus Printed Circuit (002463.SZ), Jingwang Electronics (603228.SH), and Zhaoke Ophthalmology (300903.SZ).
Risk factors include the potential for downstream demand to fall short of expectations, intensifying competition within the industry, risks associated with new product development falling short, and increased uncertainty due to supply chain shifts.
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