Nanya Tech's strong 2Q26 read-through strengthens the upward memory industry view

Overview

This report uses Nanya Technology 2Q26 earnings as an industry read-through sample to assess the implications for Samsung Electronics and the Asia Pacific memory semiconductor industry. The core conclusion is that DRAM pricing strength and margin improvement remain robust, AI and general server demand continues to support memory demand, while supply constraints keep non-server segments relatively tight. Goldman Sachs believes these signals align with its positive view on the memory industry and further support Samsung Electronics' Buy rating.

Core views

The core views in the report include three points: first, Nanya Technology's DRAM ASP has risen strongly for two consecutive quarters, driving a significant OPM recovery, indicating the memory price cycle remains in a favorable phase; second, AI and general server demand are absorbing supply and limiting supply outside the server segment, and supply tightness may persist for several quarters; third, long-term agreements (LTAs) help smooth cyclical swings in the memory industry, and the recently announced greenfield capacity expansion is seen as reasonable and aligned with multi-year LTA agreements. For Samsung Electronics, Goldman Sachs sees strong regular DRAM ASP and OPM performance, and industry information further reinforces its positive rating.

Analysis framework

The report uses a combined approach of company earnings read-through and industry supply-demand assessment: first interpreting Nanya Technology 2Q26 ASP, OPM, and management outlook, then mapping it to Samsung Electronics' DRAM business performance, and combining Goldman Sachs' existing positive memory industry stance, SOTP valuation framework, and relative rating framework for coverage names to form an investment conclusion.

Methodology notes

• Valuation methodsEV/EBITDA-based SOTP

  12-month target price valuation

  Samsung Electronics common stock 12-month target price of W480,000 is based on an EV/EBITDA-based SOTP method for 2026-2027E; preferred stock 12-month target price of W360,000 is based on a 25% target discount to the common shares.

• factor_profileGS Factor Profile

  Comparison of growth, financial returns, valuation multiples, and composite factors

  The Goldman Sachs Factor Profile provides investment context by comparing the stock's growth, financial returns, valuation multiples, and composite attributes with covered stocks and industry peers on a percentile basis.

• event_read_acrossPeer earnings read-across

  Peer earnings read-through

  The report uses Nanya Technology's DRAM pricing, margin and supply-demand outlook as an industry signal to judge the direction of Samsung Electronics' memory business and the industry cycle.

• risk_frameworkPrice Target Risks

  Downside risks to the price target

  The report lists the main downside risks to Samsung Electronics' target price as a sharp deterioration in memory supply-demand conditions, a steep compression of smartphone margins, and loss of market share in the mobile OLED segment.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Samsung Electronics (005930.KS)

  Primary covered name; Nanya Technology results provide a positive read-through to its DRAM business

  Strengths

  Strong DRAM ASP and OPM estimates, benefiting from AI and server demand, tight supply, and a positive memory industry cycle.

  Weaknesses

  Earnings remain exposed to memory cyclicality, smartphone margin, and mobile OLED competitive risks.

  Comparison

  Improvement in Nanya Technology's ASP and margins provides validation for the industry price and supply-demand backdrop; Goldman Sachs believes this information is consistent with its constructive view on Samsung Electronics.

  Risks

  Deterioration in memory supply-demand, sharp smartphone margin contraction, and loss of mobile OLED market share.

• Samsung Electronics (Pref) (005935.KS)

  Preferred shares of the same covered company; valuation is derived from a discount to common share targets

  Strengths

  Shares the same underlying fundamental improvement logic as common shares, with target price based on a 25% discount to common shares.

  Weaknesses

  Preferred share valuation is affected by changes in the relative discount versus common shares.

  Comparison

  Preferred share 12-month target price is W360,000, while common share 12-month target price is W480,000.

  Risks

  In addition to company-level risks, there is also the risk of an expanding relative discount of preferred shares versus common shares.

• Nanya Technology

  Not covered name; used as an industry read-through source

  Strengths

  Significant improvement in 2Q26 ASP and OPM, with management's demand and supply-tightness outlook remaining constructive.

  Weaknesses

  The report does not provide a Goldman Sachs coverage rating, and its role is primarily as an industry signal rather than a direct investment conclusion.

  Comparison

  Nanya Technology's 2Q26 results are used to support a positive judgment on Samsung Electronics and the memory industry.

  Risks

  If its subsequent pricing or margins reverse, it could weaken the strength of the upside read-through.

Key data

• Nanya Technology 2Q26 ASPUp more than 60% QoQContinues strong growth after a more than 70% QoQ increase in 1Q26.
• Nanya Technology 2Q26 OPM74%OPM improved by 13 percentage points sequentially, driven by strong ASP growth.
• Samsung Electronics 2Q26 regular DRAM ASP estimateUp 47% QoQGoldman Sachs read-through estimate for Samsung Electronics' DRAM business.
• Samsung Electronics 2Q26 DRAM OPM estimate80%Goldman Sachs expects Samsung Electronics DRAM margins to be at a high level.
• Samsung Electronics common share target priceW480,00012-month 2026-2027E EV/EBITDA-based SOTP target price.
• Samsung Electronics preferred share target priceW360,000Based on a 25% discount relative to common shares.

Impact & implications

Nanya Technology's strong ASP and OPM data reinforces the view that the upside phase of the memory cycle is still intact. If AI and general server demand continues to absorb supply, tightness in non-server memory markets may continue to support prices and margins. For Samsung Electronics, this suggests that DRAM earnings leverage could remain elevated and supports both its Buy rating and higher target price from an industry perspective.

Risks

• Significant deterioration in memory supply-demand conditions.
• Sharp contraction of smartphone business margins.
• Loss of market share in mobile OLED.
• If AI and general server demand is below expectations, memory price support and supply tightness support may weaken.
• If recent capacity additions exceed LTA absorption capacity, industry cyclical volatility could intensify again.

What to watch

• Whether Nanya Technology's 3Q26 operating results continue to improve sequentially.
• Whether DRAM ASP can remain rising or at high levels over the next several quarters.
• The absorption capacity of memory supply by AI and general server demand.
• Whether supply tightness in non-server memory markets persists.
• Whether Samsung Electronics DRAM OPM can remain at high levels.
• Whether LTA continues to ease memory industry cyclicality.