Macronix Q3 2026 Earnings Call: Record Results and Capacity Strategy

Preface

Macronix International (旺宏) reported strong financial and operating results for the third quarter of 2026, alongside plans to expand selected production capacity and advance its NOR and NAND technologies. This article summarizes the company’s financial performance, product mix, market conditions, investment timetable, and shareholder policies, followed by the key points raised during the investor question-and-answer session on 2026/10/27. The quarter brought record revenue and higher profitability, while the company emphasized that capacity remains constrained and growth is currently driven by pricing rather than increased output. Management described its strategy as concentrating resources on data centers, satellite communications, medical, industrial, and automotive markets instead of competing primarily on volume. The details below distinguish reported results from management expectations and preserve the figures and statements provided in the source.

Lazy bag

Macronix recorded third-quarter revenue of NT$24.2 billion, gross margin of 70.5%, and EPS of NT$5.52. Nine-month revenue reached NT$53.8 billion, surpassing the company’s 2021 full-year record. NAND and NOR accounted for 47% and 46% of quarterly revenue, respectively. Because available capacity is limited, management is focusing on higher-value applications and says current growth comes from pricing. The company plans to add capacity in stages, with the new investment directed mainly toward 3D eMMC NAND; the first phase is expected to enter mass production in the second half of 2027, while the additional equipment is associated with 2028 production. 3D NOR and 96-layer 3D NAND are central to the technology roadmap.

Main Body

Third-quarter financial and operating performance

Macronix reported third-quarter revenue of NT$24.2 billion, up 27% quarter over quarter and nearly three times the NT$8.2 billion recorded in the same period last year. The company described the result as a historical high. Gross margin was 70.5%, compared with 64.4% in the previous quarter. Gross profit included approximately NT$75 million in inventory reversal benefits. Operating expenses were NT$4.1 billion, up 24% quarter over quarter, with the increase mainly attributable to employee compensation accruals.

Operating income reached NT$12.9 billion, and operating margin was 53.4%, up 44% quarter over quarter; the company had recorded an operating loss in the same period last year. After-tax net income was NT$10.95 billion, up 42% quarter over quarter. Earnings per share (EPS) were NT$5.52, compared with NT$3.91 in the previous quarter. EBITDA was NT$14.3 billion, equivalent to an EBITDA margin of 59%.

For the first three quarters, revenue totaled NT$53.8 billion, an increase of 155% year over year. This surpassed the company’s previous full-year revenue record of NT$50.5 billion, set in 2021. Gross margin for the first three quarters was 62.6%, up 47 percentage points year over year; the previous gross-margin high was 48%. Operating margin was 44.3%, after-tax net income was NT$20.47 billion, EPS was NT$10.34, and EBITDA was NT$28.3 billion. For comparison, full-year EPS last year was -NT$1.77.

Balance sheet and cash flow

Net asset value per share stood at NT$36.95, compared with NT$31.28 in the previous quarter and NT$22.8 in the same period last year. Return on equity over the latest 12 months was 35%, net margin was 33%, and the debt ratio declined to 35.5%. Total assets reached NT$113.7 billion, exceeding NT$100 billion for the first time. Borrowings were approximately NT$20 billion. The convertible bonds issued last year had all been converted during the third quarter.

Cash and cash equivalents were NT$29.5 billion, approximately NT$7.2 billion higher than at the end of the first half. Operating cash flow in the quarter was NT$13.39 billion, capital expenditure (CapEx) was NT$4.3 billion, and free cash flow was approximately NT$9 billion. Full-year depreciation and amortization was estimated at approximately NT$5 billion to NT$5.1 billion. Inventory increased by approximately NT$1.7 billion quarter over quarter, primarily because of work in progress generated by the company’s active production ramp.

Product mix and demand conditions

NAND represented 47% of third-quarter revenue, increasing 39% quarter over quarter and 768% year over year. Growth was mainly driven by eMMC, a product Macronix began supplying only about a year ago. NOR accounted for 46% of revenue, up 21% quarter over quarter and 158% year over year. The company said demand for high-capacity NOR in data centers continues to increase. ROM is being phased out gradually and will no longer be reported separately beginning with the next earnings call. The 8-inch fab has been converted to NOR production, limiting the scale of the foundry business.

Computing applications in data centers accounted for 47% of NOR revenue and remained a major growth driver. Management said demand was strong enough that the company was “being chased by customers.” Automotive demand continued to grow in absolute terms, but multiple applications compete for limited capacity, causing automotive’s share of revenue to decline. Data-center NOR demand is moving from 512Mb toward 1Gb and 2Gb products. One 2Gb device is equivalent in capacity to four 512Mb devices.

Communications is the largest application for eMMC, and demand for space communications, including low-Earth-orbit satellites, continues to grow. Macronix said it considers itself well positioned and that several companies have proactively approached it about cooperation. The company said all current growth comes from higher prices because capacity has not yet increased. It is allocating production to markets it considers high quality, including data centers, satellite communications, medical, industrial, and automotive applications. Management stressed that “Macronix is not a me-too company,” describing differentiation and application-specific value as more important than pursuing volume alone.

Capacity investment and production schedule

At the beginning of the year, Macronix planned investment of NT$22 billion. The board later approved an additional NT$15.8 billion, bringing the total to more than NT$30 billion. Equipment for the first phase has begun arriving this year. After customer qualification, this phase is scheduled to enter mass production in the second half of 2027. Equipment covered by the additional NT$15.8 billion is expected to arrive in the second half of 2027 through the end of that year, with mass production expected in 2028.

The company said it will not add further NOR capacity. The principal use of new capacity will be 3D eMMC NAND. In response to investor questions about whether expansion was delayed and whether new NOR output could begin in the first half of 2027, management reiterated that the first-phase schedule is established for mass production in the second half of 2027. It also said NOR capacity would not be expanded and that investment would focus on 3D eMMC NAND. Management added that, if the company finds the right customers, higher contract prices are inevitable.

Technology and product strategy

Macronix introduced new 3D NOR designs in July and October. Management said the problems encountered in earlier development had been resolved and that 2Gb and 4Gb high-capacity products are expected within 1–2 years. A demo board is scheduled to be shown at Electronica in early November. The company said 3D NOR is intended to provide functions that 2D NOR cannot, in addition to greater capacity, and identified product quality as the next major focus.

For 3D NAND, the company expects 96-layer technology to be the main eMMC NAND process in 2027. Management described the yield as good and the profitability as clearly higher than that of 2D NAND. Macronix also plans to simplify its range of manufacturing processes over time. As major suppliers such as Samsung withdraw from low-capacity NAND, Macronix sees an opportunity to replace some of that supply, with a larger revenue contribution expected in 2027. However, management emphasized that available capacity limits how much demand it can serve and that the company will adjust as conditions evolve.

Investors asked about 192-layer NAND, TLC/QLC products above 300 layers, 3D NOR, and 1.2V NOR. Management said those research programs were not affected and would continue to receive attention, while noting that new technologies carry uncertainty and require a learning curve. Macronix does not intend to compete head-on with Samsung, SK Hynix, or Micron given its smaller scale. Instead, it aims to create differentiated products and customer value. When asked to compare wafer output from 48-layer and 96-layer 3D NAND with 2D 19-nanometer NAND, management did not provide a numerical multiple; it reiterated that 96-layer NAND would be the primary eMMC process next year, with good yield and stronger profitability than 2D.

Inventory, allocation, and customer relationships

Management attributed the 24% quarter-over-quarter increase in operating expenses mainly to employee compensation. Under the company’s articles of incorporation, 15% of profit is allocated to employees, and the related compensation has already been accrued as an expense. Inventory was described in one investor question as increasing approximately 18% to about NT$11.5 billion. Management said the increase mainly reflected work in progress (WIP) resulting from active production. The company begins production of final goods after receiving customer orders.

The company did not specifically identify which product generated the inventory reversal benefit. It said eMMC is a new product and did not contribute to inventory reversals; historical reversals mainly came from NOR. Inventory reduction will proceed step by step, and further reversals may occur over time. Management also noted that NOR shipment volume declined 12% quarter over quarter, not because demand had weakened, but because factory capacity was limited and some capacity was shifted to NAND, which grew substantially. Allocation decisions, it said, are based on what best supports the company’s long-term development.

Management did not consider the shipment share of data centers within computing applications to be the most important measure. It emphasized the identity and strategic importance of customers. With supply constrained, Macronix decides how output is allocated and prioritizes important applications and long-term customers. The semiconductor production cycle is approximately 5–6 months, so allocation cannot be changed frequently. The company said it would continue supporting long-term strategic markets such as industrial, automotive, medical, and satellite communications and would not compete by cutting prices.

Macronix said it has not signed a long-term agreement (LTA) with any customer. The chairperson stated that the company would sign only contracts that are fair to both parties. Management expects inventory replenishment to continue in 2027, although not necessarily at the same scale as this year. Given limited capacity, it intends to smooth shipments and then use new capacity to sustain the business. When asked whether next year’s capacity growth would come mainly from satellite communications or data centers, management did not give a direct answer and invited the questioner to assess where capacity would be allocated.

Governance, competition, and shareholder returns

The company’s policy of allocating 15% of profit to employees was reflected in the current period’s expense accruals. Macronix had no preliminary plan for next year’s dividend. Management said dividend decisions fall within the board’s remit and would be discussed with directors next year.

In response to questions about Chinese NAND capacity expansion, the company declined to comment on external suppliers. It also declined to rank the price-increase potential of different product lines, saying pricing depends on demand and that every product can potentially rise in price when it provides a valuable solution that customers accept. ROM is being phased out because resources are limited and the company has shifted its focus toward NOR and eMMC, which have less connection to gaming applications.

Asked about the end-of-life status of 2D NAND products from Samsung, Kioxia, and SK Hynix, management said customers would seek alternatives, but Macronix could not supply every customer and would prioritize established, long-term relationships. The company declined to comment on a competitor’s acquisition of Taiwanese NOR capacity, stating that competition is positive. It said it avoids me-too products and seeks to create new applications through new ideas; it also described itself as the world’s largest supplier of medical flash memory. For industrial-grade and commercial-grade eMMC, management said the specifications differ to some extent and that Macronix offers both types while ensuring products meet customer requirements.

On data-center demand, management said high-capacity NOR is largely associated with the newest data-center systems. It described quality requirements in these applications as extremely high and said Macronix holds a leading position in this area. When asked whether demand was concentrated among a few AI server customers or related to NVIDIA Blackwell upgrades versus general servers, management did not provide a more specific breakdown.

Finally, management said NOR pricing depends on demand rather than a fixed ranking across product lines. The company’s stated approach is to offer differentiated, valuable solutions, maintain relationships with long-term customers, and direct constrained capacity toward applications it regards as strategically important. Its expansion roadmap is therefore selective: no additional NOR capacity is planned, while investment is directed mainly toward 3D eMMC NAND and the development of higher-capacity 3D NOR.

Key Insights Table