Big Four Rally Together for Subscription! Storage Giant Locks in 17 Billion Yuan Expansion Financing

DRAM major South Asia officially announced on the 25th a private placement of 78.718 billion New Taiwan Dollars (approximately 17.004 billion RMB), with several industry giants participating.

Kioxia, SanDisk, Solidigm (a subsidiary of SK Hynix), and Cisco will each subscribe to 70 million, 138.68 million, 71.39 million, and 71.50 million common shares respectively, totaling 351 million shares. The private placement price for South Asia’s common stock is set at 223.9 New Taiwan Dollars per share, which is only a 1.15% discount compared to the closing price of 226.5 New Taiwan Dollars on the 25th.

The company plans to use the funds raised to invest in advanced memory manufacturing plants and production equipment to meet the growing demand for AI computing in the future.

South Asia is a subsidiary of Formosa Plastics Group, mainly engaged in R&D, design, manufacturing, and sales of DRAM products, including DDR4, DDR5, and low-power memory series.

Previously, driven by AI demand for HBM, giants like Samsung, SK Hynix, and Micron allocated capacity for HBM, leading to a supply gap in both general and niche storage products. As a result, orders for South Asia and other manufacturers surged, benefiting from the rapid price increase of DDR4 and delivering outstanding performance.

Regarding the investment by these four giants in South Asia, industry sources cited by media reports say that despite SK Hynix’s self-production of DRAM, the rapid growth in SSD demand has significantly increased DRAM requirements. To ensure supply, related manufacturers are not only signing long-term contracts with South Asia but also strengthening supply through investments.

It is worth noting that as early as January this year, there were reports that some storage manufacturers had discussed supply commitments extending to 2030, involving suppliers including South Asia. At that time, supply chain sources indicated that long-term supply agreements (LTAs) signed by major storage companies like Winbond and South Asia were often “volume lock-in without price lock-in,” with durations extended from one year to at least two years, and some major clients even discussing long-term cooperation frameworks approaching 2030.

Guosheng Securities’ research report on the 25th pointed out that the era of AI-driven storage demand has arrived. The current storage market has broken out of previous cyclical patterns and entered a new growth era driven by artificial intelligence reshaping fundamental logic. In the context of tight supply and demand, module manufacturers that secure stable, high-quality supply are expected to benefit significantly from the storage upgrades, price increases, and localization during the AI storage boom, with notable performance elasticity and broad valuation upside. Storage is a sector with performance (margin of safety) and long-term logic (AI + localization). The outlook for continued storage price increases is positive, emphasizing investment opportunities in the AI storage era.

(Source: Cailian Press)