Revenue jumped 29% while operating margins remain 20 points below their 2023 peak.
Thesis: Nan Ya is a commodity passenger on the AI cycle. Volume recovery in 800G switches masks structural margin compression. They lack the leverage to recapture 2023 profitability levels because TSMC controls the CoWoS bottleneck. The company is trapped in a China-heavy footprint with unhedged FX exposure and declining automotive share.
Verdict: SHORT — Conviction: MEDIUM
Catalyst: A Q2 margin print that fails to expand despite the 800G switch ramp.
Key Risk: A sudden acceleration in CoWoS capacity that creates a genuine substrate supply squeeze.
The Tell: The General Manager admitted they have no way to hedge FX because the TWD appreciation happened too fast. This reveals an operational vulnerability to macro moves they cannot control.
Friction Level: MODERATE_FRICTION — The bull thesis relies on 800G switch volume as a margin engine. The bear case identifies this as a commoditized replacement for lost legacy business with zero pricing power.
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