Taiwan Memory IC Designers' Q2 Revenue Expected to Surge 245% YoY, Phison Hits Single-Month Record
Taylor Wilson
Taiwan's memory IC design companies are forecast to post combined Q2 revenue above $1.8 billion, up roughly 245% year-on-year, with Phison hitting an all-time monthly record in May — the surge is driven by AI inference demand pulling the industry's center of gravity from consumer electronics toward enterprise and data-center storage.
A 245% year-on-year jump — who is driving the demand?
DIGITIMES Research projects Taiwan memory IC designers' combined Q2 revenue will exceed $1.8 billion, up about 244.8% year-on-year.
This means → the growth is not a consumer-electronics recovery. AI inference expansion and data-center storage upgrades are pulling demand simultaneously.
NAND controller chips — the core chips that manage how flash memory reads and writes data — account for over 70% of combined revenue. DRAM makes up roughly 20%; memory IP ranks third. In plain terms = the star of this cycle is "the chip that runs the flash," not the flash memory itself.
How did Phison set a monthly record?
Phison Electronics (8299.TW) posted May 2026 revenue of NT$22.83 billion, up 301% year-on-year and 13% month-on-month — an all-time single-month record.
Cumulative January-to-May revenue reached NT$84.0 billion, up 229% year-on-year, also a historical high. NAND controller chips account for roughly 30% of Phison's sales.
CEO K.S. Pua said AI inference applications are spreading fast, NAND storage demand remains strong, and no sign of a slowdown has appeared. NAND suppliers continue to expand capacity conservatively, keeping supply tight. This means → surging demand plus restrained supply has put Phison in a window where both volume and pricing are rising.
Why is Silicon Motion accelerating too?
Silicon Motion posted Q1 revenue of $340 million — a company record — up 105% year-on-year and 23% quarter-on-quarter, with a gross margin of 47.2%.
The company guides Q2 revenue up 15%-20% sequentially and 98%-107% year-on-year, with gross margin in the 48.5%-49.5% range.
This means → as major NAND makers exit consumer-grade products, some controller demand is shifting to Silicon Motion — including its UFS 4.0 controller, a standard high-speed storage interface chip now in mainstream smartphone supply chains, lifting its market share.
What is happening on the DRAM side?
ESMT (3006.TW) is benefiting from tighter DDR3 and DDR4 supply and recovering niche demand — small-volume, specialized applications outside the mainstream — pushing its average selling prices significantly higher.
Major manufacturers are shifting capacity toward HBM — high-bandwidth memory, a premium DRAM designed specifically for AI chips — which further lifts niche DRAM prices. The Wi-Fi 7 upgrade cycle is also boosting demand for ESMT's SLC NAND.
Etron Technology stands out as well: January-to-May revenue hit NT$5.73 billion, up 411% year-on-year; Q1 EPS reached NT$1.88, a quarterly record, with memory orders stretching into H1 2027. This reflects a niche-DRAM supply-demand gap unlikely to close in the near term.
Why is memory IP companies' growth called out separately?
eMemory, M31, and YMC posted combined Q1 revenue growth of nearly 18% year-on-year. DIGITIMES projects Q2 growth will accelerate to 85.3%.
This means → AI-related design projects are scaling steadily. Memory IP companies — firms that license memory circuit design blocks to chipmakers — serve as a leading indicator of AI chip design activity.
How long can this cycle last?
Phison and Silicon Motion are each leveraging NAND controller and storage expertise to extend into AI computing, enterprise SSDs, and data-center storage solutions.
The current thesis stands on two legs: demand-side AI inference applications keep expanding; supply-side NAND makers stay conservative on capacity. Both must hold for the volume-and-price uplift to continue.
In plain terms = if AI demand growth slows, or NAND makers turn aggressive on expansion, the core support for this cycle loosens. Whether the twin supply-demand logic can keep resonating is the key test for revaluing this group of companies.
Content is for reference only, not financial advice.