[Core Information] AI boosts performance of leading distributors, Micron withdraws from mobile NAND field (2025-08-13)

1. Performance of global leading distributors: AI-driven differentiated recovery

1. Wenye Technology (No. 1 in the world): AI + integrated two-wheel drive, net profit increased by 32%

• 2025Q2 Results: RevenueNT$259.5 billion(quarterly growth of 5%, annual growth of 7%); operating profitNT$4.66 billion(quarterly growth of 2%, annual growth of 9%); net profitNT$2.83 billion(Quarterly growth of 5%,32% annual growth), EPS is NT$2.28.
• growth core: The merger and acquisition of Future has been successfully integrated for one year, and the European and American markets have recovered;Strong demand for AI servers/data centers, industrial and automotive demand is picking up.
• Q3 Outlook:Median revenueNT$291.5 billion(quarterly growth of 12%, annual growth of 12%); operating profitNT$5.1 billion(quarterly growth of 10% and annual growth of 22%); AI is the core growth driver from the second half to 2026.

2. Avnet: The Asian market is impressive, but overall profits are under pressure

• 25Q4 financial quarter (as of 7/28): RevenueUS$5.618 billion(YoY + 1%, MoM + 5.7%); GAAP operating profit$73.5 million(YoY - 55.3%, MoM - 48.7%).
• Regional Highlights: Asia revenue$2.691 billion(YoY + 17.6%, MoM + 8.4%), becoming a pillar of growth.
• Full year performance: Revenue in fiscal year 2025$22.2 billion(YoY - 6.55%); Operating profit$514 million(YoY - 39.1%).

3. Arrow Electronics: Growth exceeded expectations, net profit increased by 73%

• 25Q2 results: Revenue$7.58 billion（YoY + 10%); net profit$188 million（YoY + 73%）。
• first half: RevenueUS$14.394 billion(YoY + 4%); Net profit$267 million(+39% year-on-year), all business lines exceeded expectations.

Distribution Industry Summary

• AI is the core thread: Wenye and Arrow benefited from the demand for AI computing power and saw high performance growth; Avnet’s Asian market is strong and global profits are under pressure.
• Inventory cycle bottoms out: The European and American markets have emerged from the inventory trough, and industrial and automotive demand has steadily recovered.

2. Storage market: DDR4 surges, Micron’s strategy shrinks

1. Micron: Stop global mobile NAND development and focus on high-value areas

• strategic adjustment: Due to weak mobile NAND market and slowing growth,Termination of UFS5 development, the world halted future mobile NAND product development.
• business retention: Continue to develop and supportSSD, automotive grade NAND, industrial grade NANDIn the field of high gross profit; G9 process UFS 4.1/3.1 will be normally supplied until the transition period of 2025-2026.
• core logic:Exit the consumer electronics Red Sea and make a betAI storage, automotive regulations, industryand other high-value tracks, and cooperate with the construction of domestic production capacity in the United States.

2. DDR4: consumer-grade prices skyrocketed, with quarterly growth of 85%-90%

• Price increase core: The production capacity of the three major manufacturers (Samsung, SK Hynix, and Micron) is shifting to HBM/DDR5,DDR4 supply plummets; The demand for industrial control, Netcom, TV and other terminals is rigid.
• price performance:July contract priceSkyrocketing 60%-85%;The third quarter has been revised upward toQuarterly growth of 85%-90%；DDR4 spot price surpasses DDR5, 16GB DDR4 increased by 80% in two months.
• Supply and demand gap: DDR4 accounts for 70% of automotive DRAM and more than 80% of industrial DRAM. The supply gap reaches50%-60%; Second-tier factories (Nanya, Winbond) have full orders until 2026.

3. Wafer manufacturing: TSMC withdraws from 6-inch and accelerates 12-inch upgrade

TSMC’s production capacity strategy: focus on advanced processes and eliminate backward production capacity

• Exit plan：Phase out of 6-inch wafer business within two years, consolidating 8-inch production capacity to improve efficiency.
• Capacity structure: Current operation4 seats 12 inches, 4 seats 8 inches, 1 seat 6 inchesfactory; the investment focus is fully shifting to the 12-inch advanced process (3nm/2nm).
• Industry trends: 12-inch has become the only carrier of advanced processes (5nm and below), while 8-inch has shrunk to the niche market of specialty processes such as analog, power, and radio frequency.

4. Policy dynamics: Seven departments jointly promote breakthroughs in brain-computer interface chips

Core policy: "Implementation Opinions on Promoting Innovation and Development of the Brain-Computer Interface Industry"

• Breakthrough direction：
  1. High channel acquisition chip: Strengthen analog-to-digital conversion, channel management, noise suppression, and improve brain signal collection capabilities.
  2. Ultra-low power processing chip: Enhance parallel processing and realize the integration of perception, calculation and adjustment.
  3. High speed communication chip: Improve brain signal transmission rate and reliability, and enhance anti-interference ability.
• Industrial significance: Brain-computer interface has become a new track for AI + medical and consumer electronics, and policies have accelerated breakthroughs in the localization of core chips.

5. Summary of core trends in the industry

1. AI computing power dominates growth: Distribution, foundry, and storage will all benefit, with HBM and DDR5 becoming the technological commanding heights.
2. Storage structural differentiation: DDR4 end-of-life feast. Prices have skyrocketed, mobile NAND has been cleared, and automotive/industrial storage has become a new blue ocean.
3. Manufacturing is concentrating on large sizes: 6-inch exit, 8-inch contraction, 12-inch expansion, advanced process and mature process in parallel.
4. Domestic substitution accelerates: Policy support + demand-driven, domestic material numbers in the fields of simulation, power supply, interface and other fields are rapidly increasing.