"Orders are really overwhelming!" Storage packaging and testing prices surge by 30%, companies are planning a second round of price increases.

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The global storage chip industry chain is ushering in a new round of strong price increases, and this trend has quickly spread to downstream packaging and testing sectors. Due to capacity utilization rates approaching their limits, major storage packaging and testing companies have recently raised their quotes by up to 30%, and are planning further price hikes.

According to Taiwan Economic Daily, benefiting from major DRAM and NAND Flash manufacturers ramping up shipments, leading packaging and testing companies such as Powertech, ChipMOS, and ASE have been flooded with orders. Multiple companies have confirmed that "orders are really too full" and that existing capacity cannot meet demand. To cope with cost and supply-demand imbalances, each company has officially launched the first round of price increases, with hikes approaching 30%. This wave of price hikes is expected to be directly reflected in financial results starting from the first quarter.

In the face of a continuous influx of orders, companies have adopted a tougher stance. Relevant businesses revealed that if the supply-demand tension continues, a second round of price increases may be launched in the short term. At the same time, companies such as ChipMOS, which can only meet about 80% of customer orders, are urgently procuring equipment to expand their capacity. Market analysis points out that as major storage manufacturers focus resources on advanced processes, the supply of standard products is being squeezed, which will enhance bargaining power on the packaging and testing side.

AI Crowds Out Capacity, Standard Product Supply Tightens

The core reason for the current packaging and testing capacity shortage lies in the shift in strategic focus by upstream chip manufacturers.

As the three giants, Samsung, SK Hynix, and Micron, vigorously expand AI-dedicated HBM capacity, their resources are highly concentrated on advanced and packaging processes, resulting in a simultaneous squeeze on the output of standard DRAM and NAND chips, and a rapid tightening of supply for older-generation products.

On the demand side, as the demand from cloud and industrial control markets rebounds, there is strong pulling momentum for DDR4, DDR5, and NAND chips, further heating up downstream packaging and testing demand. This supply-demand mismatch has caused capacity utilization rates of major packaging and testing plants to soar, providing a solid foundation for price increases.

Major packaging and testing plants in Taiwan are currently operating at full capacity.

According to Taiwan Economic Daily, as the global DRAM and NAND packaging and testing leader, Powertech's capacity utilization rate is nearly full, and most of its customers are top international companies. This round of price increases is expected to directly improve its gross profit and earnings, and is seen as a benchmark for the sector's performance. ChipMOS has benefited from the resumption of orders from industrial control customers and the end of inventory clearance. Against the backdrop of the industry entering a "supercycle", order visibility has significantly strengthened.

ChipMOS is a major beneficiary of the recovery in traditional DRAM. Although its NAND revenue share is not high, DDR4 products account for about 70-80% of its revenue structure. Currently, ChipMOS is facing tremendous pressure on incoming orders, and capacity shortfalls are prompting it to actively seek procurement of testing and packaging equipment to meet surging market demand. On the issue of price increases, the above-mentioned companies have all stated that they will adjust flexibly according to market demand.

Institutional Viewpoint: AI Remains the Only Main Track

Regarding investment logic in the technology sector, a Goldman Sachs buy-side research report shows that AI remains the only certainty in the market through 2026, while non-AI sectors continue to see low attention. Investors are closely watching the Google TPU supply chain and high-end packaging and testing sectors, especially as semiconductor testing is experiencing "structural dollar content growth".

Goldman Sachs points out that as chip complexity increases, rising testing costs will bring revaluation opportunities to testing suppliers such as WinWay Technology and MPI Corporation. Although there are short-term mood swings regarding CoWoS equipment providers such as Grand Process and Syntec, in the long run, advanced packaging still has solid structural demand.

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