In-Depth Analysis of the Memory Testing and Packaging Industry: Cycle Reversal Signals and Investment Implications

Based on the latest market data obtained, I have prepared a detailed investment analysis report on the memory testing and packaging industry.

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In early January 2026, multiple memory testing and packaging factories in Taiwan successively announced price hikes for testing and packaging services, with an increase of approximately 30% (30%), and there is no ruling out a second round of price hikes in the future [1]. Benefiting from DRAM and NAND Flash manufacturers’ push to boost shipments, memory testing and packaging factories including

have seen a surge in orders, pushing capacity utilization to near full [2].

This price hike wave is not an isolated incident, but a microcosm of the overall recovery in the memory chip industry chain. According to the latest forecast from TrendForce,

, and contract prices for NAND Flash will increase 33-38% quarter-over-quarter [3]. This supply-demand imbalance is expected to persist until 2027.

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Product Type	Demand Multiple: AI Server vs. General Server
DRAM Demand	8x
NAND Demand	3x

The demand for memory chips per AI server far exceeds that of traditional servers. This “voracious” demand growth has directly driven a sharp increase in memory chip prices [4]. The four major North American cloud service providers (Google, Meta, Microsoft, and AWS), in order to seize the initiative in AI infrastructure, have been willing to pay a

over mobile phone manufacturers to lock in scarce DRAM and NAND capacity [5].

The three major memory chip manufacturers (Samsung, SK Hynix, and Micron) have actively shifted their capacity to high-value-added products in pursuit of higher profits:

• HBM Capacity Expansion
  : SK Hynix’s HBM3E capacity was essentially sold out by the end of 2025, and most of its 2026 HBM4 capacity has been pre-locked [6]
• Traditional Capacity Crowding Out
  : Production capacity for traditional products such as DDR4 and LPDDR4 has been drastically reduced. The proportion of LPDDR4 in total supply will drop from 39% in 2025 to 26% in 2026 [7]
• Production Control Strategy
  : Overseas original manufacturers have strictly implemented production control strategies, further exacerbating supply-demand tightness

Current global memory chip inventories are at extremely low levels:

• DRAM Inventory for PCs/Mobile Devices
  : Only sufficient for approximately 9 weeks
• SSD Inventory
  : Even tighter, only sufficient for approximately 8 weeks
• Server DDR Inventory
  : Only sufficient for approximately 11 weeks

This situation is far below the healthy inventory level of 10-18 weeks, and panic buying has further fueled a cyclical increase in prices [8].

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Cycle Reversal Signal	Actual Situation	Basis for Judgment
Capacity Utilization	Near Full	Powertech, Unimicron, and Nanmao’s capacity utilization is approaching full [2]
Price Elasticity	Sharp Increase	30% hike in testing and packaging prices, continuous price adjustments for DRAM and NAND [1]
Order Visibility	Significantly Improved	Manufacturers’ order visibility has strengthened, with no ruling out a second round of price hikes [1]
Inventory Cycle	Inventory Bottoming Out	Finished goods inventory is only about 4-5 weeks, leaving almost no buffer on the supply side [6]
Capital Expenditure	Cycle Restart	Memory giants and advanced manufacturing processes have restarted capital expenditures [9]

Multiple institutions have given positive expectations for the sustainability of the memory price hike cycle:

• TrendForce
  : In 2026, the average selling price (ASP) of DRAM will increase by approximately 58% year-over-year, and the ASP of NAND Flash will increase by 32% year-over-year [10]
• Citibank
  : Has raised its 2026 NAND ASP growth forecast from 44% to 74%
• Analyst Expectations
  : This upward cycle is expected to last at least until the end of 2026, and may even continue into 2027 [8]

Based on an analysis of both supply and demand sides,

. This cycle has the following characteristics:

1. Structural rather than Cyclical
   : The demand growth driven by AI is structural, rather than a simple inventory cycle
2. Long Duration
   : The supply-demand gap is expected to be difficult to alleviate in the short term, and both the intensity and duration of the cycle exceed expectations
3. Industry Chain Transmission
   : Price increases have formed a complete transmission chain from memory chips to the testing and packaging link

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, with most clients being top international memory manufacturers.

Indicator	Current Status
DRAM Capacity Utilization	Near Full
NAND Capacity Utilization	Maintained at a High Level
Price Hike Elasticity	Directly Reflected in Gross Margin and Profitability
Industry Position	Benchmark for Operational Performance of the Sector

: Facing a “talent war” brought about by TSMC’s CoWoS capacity expansion, some orders have spilled over to ASE Group [11].

, and was deeply affected by adjustments in industrial control and special application demand over the past year.

Indicator	Current Status
Customer Recovery Status	Industrial control customers have gradually resumed normal ordering
Inventory De-stocking	Completed
Capacity Utilization	Significantly Increased
Order Visibility	Strengthened

Unimicron is a representative beneficiary of the recovery in traditional DRAM market conditions, and its outlook is promising against the backdrop of a “super cycle” in the memory industry [11].

, which is its core product line supporting operations.

Indicator	Current Status
DDR4 Revenue Share	70-80%
DRAM Layout	In-depth Deployment
Price Hike Potential	High Elasticity

, the world’s third-largest testing and packaging foundry, delivered a strong Q3 2025 financial report:

• Quarterly revenue of RMB 10.06 billion, an 8.6% quarter-over-quarter increase, hitting a new historical high for the same period
• Net income attributable to parent company of RMB 480 million, an 80.6% quarter-over-quarter increase
• Capacity utilization has significantly improved, with wafer-level packaging, power device, and power management chip packaging production lines operating near full capacity [12].

is also actively deploying advanced packaging, and its 2026 private placement plan shows that it will continue to increase investment in advanced packaging business [13].

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Sub-sector	Beneficiary Logic	Beneficiary Targets
CoWoS	TSMC’s tight capacity leads to order spillover	ASE Group, SPIL
2.5D/3D Packaging	Driven by AI Chip Demand	JCET Group, Tongfu Microelectronics
HBM Packaging	Core Component of AI Servers	STX Microelectronics, Taitech
Chiplet	Trend of Computing Power Chip Integration	Tongfu Microelectronics, Yongxi Electronics

has received a strong recommendation from Morgan Stanley:

• Investment rating reaffirmed as “Buy”
• Target price sharply raised from NT$228 to NT$308
• Advanced packaging and testing revenue is expected to reach US$3.5 billion in 2026 [14].

Sub-sector	Investment Logic	Beneficiary Targets
DRAM Testing and Packaging	Strong Demand for DDR4/DDR5	Powertech, Nanmao, Unimicron
NAND Testing and Packaging	Strong Demand for Enterprise SSDs	Powertech, Unimicron
Niche Memory	Domestic Replacement + Demand Recovery	GigaDevice, Ingenic Semiconductor

Sub-sector	Beneficiary Logic	Beneficiary Targets
Bonding Equipment	Demand from HBM/Chiplet Packaging	Junhua, Suote, Huafeng Test & Control
Probe Stations	Demand for Advanced Testing	Helin Micronano, Changchuan Technology
Lead Frames	Upgrade of Packaging Materials	Kangqiang Electronics, Huatian Technology

Risk Type	Details	Response Strategy
Valuation Risk	Stock prices have already priced in some expectations	Focus on valuation safety margins
Overcapacity Risk	Capacity release may occur after 2027	Focus on order visibility
Technology Iteration Risk	Changes in HBM4/Advanced Packaging Technology	Focus on technology deployment
Geopolitical Risk	Export controls on equipment/materials	Focus on progress of domestic replacement

:

1. Top Picks
   : ASE Group (Advanced Packaging Leader + Beneficiary of Order Spillover)
2. High-Elasticity Targets
   : JCET Group (Mainland China Testing and Packaging Leader + High Earnings Growth)
3. Cyclical Targets
   : Powertech, Unimicron, Nanmao (Direct Beneficiaries of Memory Testing and Packaging)

: Currently in the early to middle stage of the upward cycle, with both prices and volumes rising. It is recommended to actively allocate to the testing and packaging sector.

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1. The 30% price hike by memory testing and packaging factories is a clear signal of a cycle reversal in the memory industry chain
   , rather than a short-term fluctuation
2. AI-driven structural demand
   is the fundamental driver of this cycle, and its duration is expected to exceed expectations
3. The bargaining power of the testing and packaging link has significantly improved
   , and the situation of both prices and volumes rising is expected to persist throughout 2026
4. Advanced packaging and memory testing and packaging are the core beneficiary directions
   , and active allocation is recommended

Time Frame	Expected Changes
Q1 2026	DRAM contract prices will continue to rise 55-60%, and the benefits of price hikes by testing and packaging factories will become apparent
Full Year 2026	Memory testing and packaging sector will see “both prices and volumes rising”, and related players will see significant earnings growth
After 2026	Focus on the advancement of HBM4 generation and capacity release rhythm

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[1] Sci-Tech Innovation Board Daily - “Multiple Memory Testing and Packaging Factories Raise Prices: 30% Increase, No Ruling Out Second Round of Hikes” (2026-01-12)
[2] Taiwan Economic News - Memory Testing and Packaging Factories See Surge in Orders, Capacity Utilization Near Full (2026-01-12)
[3] TrendForce - “Original Factories Tilt Capacity to Server Applications, Contract Prices for All Memory Products to Continue Rising in Q1 2026” (2026-01-05)
[4] Sina Finance - “2025-2026 Global DRAM Market Price Hike Trend and Analysis” (2026-01)
[5] CICC Research Department - Analysis of AI Server Demand for Memory Chips (2025-12)
[6] Market Analysis - HBM Market Supply-Demand Analysis and Price Forecast (2026-01)
[7] HPE - “Memory Price Hike Wave Hits! How HPE Uses Technological Innovation to Navigate the Cost Cycle in 2026?” (2025-12-16)
[8] Counterpoint Research - Memory Chip Inventory and Supply-Demand Forecast (2026-01)
[9] Sinolink Securities - “Memory Expansion Cycle Coupled with Accelerated Independent Control, Bullish on Semiconductor Equipment Industry Chain” (2025-12-04)
[10] TrendForce - 2026 Memory Market Price Forecast (2025-12)
[11] United Daily News - “Memory Testing and Packaging Price Hike Wave: Powertech, Unimicron, Nanmao Raise Prices by 30%” (2026-01-12)
[12] JCET Group - Q3 2025 Financial Report and Earnings Call (2025-10-23)
[13] Tongfu Microelectronics - Feasibility Analysis Report on 2026 Private Placement of A-Shares (2026-01-09)
[14] Morgan Stanley Research Report - ASE Group Investment Rating and Target Price Adjustment (2026-01-08)