Macronix 2Q26 Earnings: Gross Margin Reaches 64.4%, from 15.6% a Year Ago

Macronix International, listed in Taiwan as 2337 TT and headquartered in Hsinchu, is an integrated device manufacturer in non-volatile memory. The company designs and manufactures NOR flash, NAND flash including eMMC, and mask ROM in its own fabs, serving consumer, communication, computing, automotive, and networking customers, alongside a small foundry business. Weighted average shares outstanding were 1,980m in the quarter, and book value per share reached NT$31.28 at 30 June 2026.

Metric	2Q26	YoY	QoQ
Net sales (NT$m)	19,125	+181%	+83%
Gross margin	64.4%	+48.8ppt	+23.6ppt
Operating income (NT$m)	8,968	n.m.*	+364%
Operating margin	46.9%	+62.8ppt	+28.4ppt
Net income (NT$m)	7,736	n.m.*	+335%
EPS (NT$)	3.91	vs (0.69)	vs 0.90
EBITDA (NT$m)	10,563	vs (26)	+207%
NOR share of sales	48%	+101% rev YoY	+48% rev QoQ
NAND incl eMMC share of sales	43%	+798% rev YoY	+163% rev QoQ
Cash (NT$m)	22,295	+81%	+40%
Free cash flow (NT$m)	7,360	vs 3	vs 1,977
Next-quarter guidance	n.d. (Macronix issues no quantitative dollar guidance)

* n.m. = not meaningful: the prior-year period was a loss (operating loss NT$1,079m, net loss NT$1,276m), so a YoY growth rate does not apply.

Source: Company disclosures, Zero One Investment Research

1. Revenue nearly tripled YoY, and profit reversed a year-ago loss

Macronix reported 2Q26 net sales of NT$19,125m (US$604.8m), up 83% QoQ and 181% YoY. Gross profit reached NT$12,320m at a 64.4% gross margin, operating income NT$8,968m at a 46.9% operating margin, and net income NT$7,736m against a NT$1,276m loss in 2Q25. EPS was NT$3.91 after NT$0.90 in 1Q26 and a NT$0.69 loss a year earlier.

The quarter was already visible in monthly disclosures: April, May, and June each set consecutive company revenue records, ending at NT$6.96bn in June. First-half revenue of NT$29,593m, up 129% YoY, exceeds the NT$28,880m Macronix reported for all of 2025. EBITDA reached NT$10,563m at a 55% margin, against an EBITDA near zero a year earlier.

Quarterly street estimates are not available for Macronix, so the comparison sits at the full-year level. 1H26 revenue stands at 36% of the street's NT$81.5bn FY2026E figure, a year the street models as heavily second-half weighted on rising memory prices. Section 5 works through that arithmetic.

Income statement	2Q26	2Q25	YoY	1Q26	QoQ
Net sales (NT$m)	19,125	6,799	+181%	10,469	+83%
Gross profit (NT$m)	12,320	1,064	+1,058%	4,271	+188%
Gross margin	64.4%	15.6%	+48.8ppt	40.8%	+23.6ppt
Operating expenses (NT$m)	(3,352)	(2,143)	+56%	(2,339)	+43%
Operating income (NT$m)	8,968	(1,079)	n.m.	1,933	+364%
Operating margin	46.9%	(15.9%)	+62.8ppt	18.5%	+28.4ppt
Net income (NT$m)	7,736	(1,276)	n.m.	1,779	+335%
Basic EPS (NT$)	3.91	(0.69)	n.m.	0.90	n.m.
EBITDA (NT$m)	10,563	(26)	n.m.	3,443	+207%

n.m. = not meaningful: the prior-year period was a loss, so a YoY growth rate does not apply.

Source: Company disclosures, Zero One Investment Research

Source: Company disclosures, Zero One Investment Research

2. NAND became 43% of sales, and eMMC led the growth

NAND including eMMC grew 163% QoQ and 798% YoY, taking its share of parent-company sales from 30% in 1Q26 to 43%. Within that book, eMMC revenue grew 317% QoQ and 5,334% YoY off a small year-ago base, and now makes up 58% of NAND revenue, from 37% a quarter earlier. Communication devices are the anchor customer base at 55% of NAND revenue, and every NAND end market except automotive more than doubled QoQ.

NOR revenue rose 48% QoQ and 101% YoY and remains the largest product line at 48% of sales. Computer applications lead the NOR book at 48% of segment revenue after growing 177% YoY. Automotive NOR, the weakest line in 1Q26, recovered to +15% QoQ and +11% YoY revenue growth. ROM revenue rose 37% YoY, reversing its decline, and the foundry business was the one flat line at -1% YoY.

Source: Company disclosures, Zero One Investment Research

Product line (parent company)	Share of sales	QoQ	YoY
NOR	48%	+48%	+101%
NAND incl eMMC	43%	+163%	+798%
of which eMMC	58% of NAND	+317%	+5,334%
ROM	6%	+40%	+37%
FBG (foundry)	3%	+20%	-1%

Source: Company disclosures, Zero One Investment Research

3. Memory pricing took gross margin above the 2021 cycle peak

Gross margin of 64.4% is the highest in the quarterly series Macronix disclosed back to 1Q21; the 2021 cycle peaked at 48%. The company does not bridge the margin move, but the price backdrop is documented: TrendForce tracked NOR contract prices up 100-120% and SLC NAND up 130-150% in the first half, with both product families still in undersupply. Management's deck states that pricing reflects market trends under strong demand across segments.

The cost base barely moved while revenue tripled. Depreciation and amortization was NT$1,263m in the quarter, in line with NT$1,266m a year earlier, so the incremental revenue carried little incremental fixed cost. Operating expenses rose 56% YoY to NT$3,352m, led by general and administrative costs at NT$922m, up 141% YoY. Accrued employee compensation and director remuneration on the balance sheet reached NT$2,297m, against NT$56m a year ago, so profit sharing is accruing alongside the earnings.

Operating margin reached 46.9% and the EBITDA margin 55%. A NT$232m non-operating gain and a 15.9% effective tax rate took net margin to 40.5%. The 2Q26 tax charge of NT$1,464m compares with a NT$132m benefit a year earlier; current tax liabilities of NT$1,266m now sit on the balance sheet against NT$2m a year ago.

Source: Company disclosures, Zero One Investment Research

4. The incremental NT$15.8bn capex budget buys capacity that lands mostly in 2027

Management announced an incremental capex budget of NT$15.8bn for advanced capacity. That comes on top of the NT$22bn 2026 investment program announced in January to ease what the company then called severe shortages. Reported 2Q26 capex was NT$479m, or 2.5% of revenue, so the announced spending sits almost entirely ahead.

The timing matters for pricing. On the April call, management said most new equipment would only be delivered in 2027 because tool suppliers are booked by larger memory makers' expansions. The deck repeats that SLC NAND and eMMC capacity will be expanded to meet demand, and adds a product-cycle marker: automotive eMMC ships in 2027. Until that equipment arrives, supply growth comes mainly from mix and utilization within the existing fabs.

Funding is internal. The quarter produced NT$7,839m of operating cash flow against NT$479m of capex, cash ended at NT$22,295m, up 81% YoY, and the debt ratio fell to 35.8% from 45.1% a year earlier. The full NT$37.8bn of announced 2026 programs equals about 1.7x the current cash balance, spread over the equipment delivery schedule.

5. The first half is 36% of the street's full year; the second half needs NT$51.9bn

Bloomberg FY2026E consensus of NT$81.5bn implies NT$51.9bn of second-half revenue, 75% more than the first half Macronix just reported. That requires monthly sales averaging NT$8.6bn against June's NT$6.96bn record. With fabs full and new equipment mostly arriving in 2027, the bridge from NT$7bn months to NT$8.6bn months is price and mix rather than volume, and both NOR and SLC NAND contract prices were still rising into 3Q26 per TrendForce.

The margin side of consensus looks better covered. The street's NT$47.6bn FY2026E gross profit, net of the NT$16.6bn reported in the first half, needs a 59.8% gross margin on the implied second-half revenue. Macronix just printed 64.4%, 4.6ppt above that requirement. The margin rate is covered; whether absolute full-year gross profit reaches the street's NT$47.6bn still depends on the second-half revenue bar above, which needs contract prices to keep rising rather than hold.

NT$m	1H26 actual	FY26E consensus	Implied 2H26E	1H26 % of FY
Net sales	29,593	81,454	51,861	36.3%
Gross profit	16,591	47,617	31,026	34.8%
Gross margin	56.1%	58.5%	59.8%	n.a.
Net profit	9,515	29,636	20,121	32.1%

Implied 2H26E = Bloomberg FY2026 consensus minus reported 1H26. Quarterly street splits are not available for Macronix.

Source: Company disclosures, Bloomberg consensus, Zero One Investment Research

Source: Company disclosures, Bloomberg consensus, Zero One Investment Research

6. No dollar guide, but management says the shortages persist

Macronix does not issue quantitative revenue or margin guidance, and the 2Q26 release keeps that practice. The forward statements in the deck are directional: high-density NOR remains in undersupply with demand increasing, the SLC NAND and eMMC shortage persists with capacity expansion planned, and automotive demand is stable with high-density automotive NOR shifting toward SLC NAND.

The reference points for the second half are therefore external: TrendForce projects 3Q26 NAND contract prices up 10-15% QoQ, with gains moderating as consumer price tolerance reaches its limit, and in June reported no significant capacity additions announced for NOR or SLC NAND. Monthly revenue disclosures, the next of which lands in early August, remain the highest-frequency check on whether the street's implied NT$8.6bn monthly average is forming.

7. High-density NOR stays short, and automotive shifts toward SLC NAND

The earnings call was held on release day and a transcript was not yet available at writing; the themes below are from the presentation deck. On NOR, management describes strong demand across all segments with prices reflecting market trends, and high-density NOR specifically in undersupply with demand still increasing.

On automotive, the deck marks a product transition: demand is stable, and high-density automotive NOR is shifting toward SLC NAND, with automotive eMMC shipping in 2027. Automotive is currently 11% of NOR revenue and 2% of NAND revenue, so the transition moves a stable demand base toward the product family with the steeper pricing curve.

On NAND, the deck's one-line summary carries the thesis: the SLC NAND and eMMC shortage remains, and capacity will be expanded to meet demand. The eMMC book has grown from 37% to 58% of NAND revenue in a single quarter, concentrated in communication devices at 55% of segment revenue.

8. Cash rose 81% YoY and the debt ratio fell to 35.8%

Operating cash flow of NT$7,839m against NT$479m of capex left NT$7,360m of free cash flow, after NT$1,977m in 1Q26 and roughly zero a year ago. Cash ended at NT$22,295m, up from NT$15,969m a quarter earlier. Financing consumed NT$973m, and total interest-bearing debt of NT$21,228m now sits below the cash balance.

Trade receivables tripled YoY to NT$10,267m, tracking the revenue surge. Inventories fell 20% YoY to NT$9,756m even as sales nearly tripled: Macronix is shipping out of stock faster than it can rebuild it. Equity reached NT$61,944m, helped by NT$3,548m of other comprehensive income in the quarter, and book value per share of NT$31.28 is up 37% YoY. The debt ratio of 35.8% compares with 45.1% a year ago.

NT$m	2Q26	1Q26	2Q25
Cash	22,295	15,969	12,284
Inventories	9,756	9,276	12,146
Property, plant and equipment	37,118	37,488	40,627
Interest-bearing debt (ST + LT)	21,228	22,181	27,429
Debt ratio	35.8%	38.3%	45.1%
Shareholders' equity	61,944	50,648	42,467
Book value per share (NT$)	31.28	25.58	22.91
Cash flow from operations	7,839	2,195	769
Capital expenditures	(479)	(218)	(766)
Free cash flow	7,360	1,977	3

Source: Company disclosures, Zero One Investment Research

9. Consumer price tolerance, the second-half revenue bar, and 2027 capacity are the risks

Pricing is the risk that carries the most weight in both directions. TrendForce flagged on 3 July that 3Q26 NAND contract price gains are moderating as consumer price tolerance reaches its limit. Consumer applications are 23% of Macronix's NAND revenue and 7% of NOR revenue, and the eMMC book is concentrated in communication devices, a consumer-adjacent category. A demand response to higher prices would hit the fastest-growing part of the mix first.

The street's implied second half is a high bar on revenue. NT$51.9bn requires monthly sales 24% above the June record with no new equipment arriving until 2027, so the entire gap must come from further price increases and mix shift. If contract prices plateau at current levels rather than keep rising, full-year revenue lands below consensus even with margins holding above the consensus requirement.

Customer concentration in the eMMC ramp is undisclosed. Communication devices took 55% of NAND revenue in the quarter, and trade receivables tripled YoY to NT$10,267m. Macronix does not disclose customer-level detail, so the durability of the eMMC order book rests on unnamed buyers whose own demand visibility cannot be checked from the outside.

Industry supply arrives in 2027. Macronix's own NT$37.8bn of announced programs, and the capacity additions its larger competitors have ordered tools for, largely land from 2027. The current margin level reflects a market where supply cannot respond; capacity arriving across the industry in 2027, meeting a consumer demand base already stretched on price, is the medium-term version of the pricing risk, persistent from prior quarters. The new tools also raise depreciation from 2027, so the fixed-cost base that stayed near NT$1.3bn per quarter through this ramp starts rising just as the industry's supply arrives.