Chemical and electronic materials leader Nanya Plastics Industrial Co., Ltd. (Nanya) confirmed on Friday that it has raised prices for electronic materials multiple times this year, with cumulative increases exceeding 100%. This statement followed a market-circulated price adjustment letter that sparked widespread attention.

According to reports, regarding the market-circulated document, Nanya clarified that the document was not an official price increase notice from the company, speculating that it was an excerpted email from price negotiations with specific customers. However, the company simultaneously confirmed that due to significant cost increases in upstream raw materials such as copper foil, fiberglass cloth, and resin, it has indeed been continuously negotiating price adjustments with customers, with cumulative electronic material price increases exceeding 100% this year. The news sent Nanya's stock price hitting the daily limit, closing at NT$207.5.

Price Increase Confirmed, but Not a Unilateral Announcement

The market-circulated document indicated that Nanya planned to raise prices for substrates and base materials by 20% each starting September 1, citing the continuous rise in raw material costs such as copper foil, fiberglass cloth, and resin, and that the company had absorbed costs as much as possible but needed moderate price adjustments due to the excessive increases.

In response, Nanya explicitly stated that the company had not implemented a comprehensive, one-time 20% price increase for all customers. Instead, it coordinates individually with each customer, "making it less likely to unilaterally issue a letter announcing a price increase." The company said that it has adjusted electronic material prices in multiple installments this year, with cumulative increases exceeding 100%, representing a phased, gradual price adjustment rather than a sudden, large single increase.

Fiberglass Cloth Shortage Most Severe, with Copper Foil Following

Nanya pointed out that among various materials, the shortage of fiberglass cloth is the most severe, with a similar situation for copper foil, both of which jointly constrain the supply of copper-clad laminates (CCL). Specifically, for fiberglass cloth, Nanya has raised selling prices amid capacity expansion and increasing sales of low-thermal-expansion-coefficient fabrics. For fiberglass yarn, the supply of electronic-grade fine yarn and special fiberglass types, such as low-dielectric and low-thermal-expansion-coefficient, is tight, and Nanya has increased production while also raising prices. For copper foil, demand for high-frequency copper foil is strong, leading to a higher order proportion, and processing fees have been raised for all specifications, with the market showing a "price and volume growth" trend.

For CCL, the tight supply of fiberglass cloth raw materials has limited competitors' access to raw materials, increasing market inquiries and order ratios for Nanya. Nanya stated that in addition to accelerating the expansion of high-end product proportions, it is also adjusting prices for medium- and low-end materials based on raw material costs, which is expected to further boost revenue in August and the third quarter.

AI Server Demand Drives Structural Supply-Demand Gap

Nanya previously stated that the four major US CSPs are continuously expanding capital expenditures, directly driving structural shortages and price pressures for upstream electronic materials in the supply chain. AI servers, due to increased chip area, more layers, and significantly higher signal transmission speeds and power consumption, have strong demand for medium-to-high-end electronic materials. However, new capacity expansion is constrained by the supply capacity of equipment manufacturers, making it difficult to close the supply-demand gap in the electronic materials market in the short term.

Looking ahead to the second half of the year, Nanya said that benefiting from strong momentum in its core electronic materials business, combined with outstanding performance from its investment affiliate Nanya Technology, it expects overall profitability in the second half to be better than in the first half.