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Macronix dumps profit hopes, predicts second loss

Macronix International Co (旺宏電子), which makes memory chips for Nintendo Co's GameCube, changed its profit forecast for the year to a NT$9.57 billion (US$285 million) loss from an original NT$927 million profit, amid stiffer price competition among game-console makers.

Shares of Macronix fell their 7 percent daily limit to a nine-month low to close at NT$16.10 per share.

Macronix blamed a slower-than-expected recovery in semiconductor demand and the writedown of inventory, spokesman Y.L. Lin said.

Nintendo, the world's second-biggest console maker, is the biggest buyer of Macronix chips. In June, Nintendo cut the price of its GameCube console in Japan by a fifth to maintain its edge on pricing over rivals Sony Corp and Microsoft Corp. Lowering prices narrows console makers' profit margins and may spill over into the price Nintendo is willing to pay for Macronix's chips.

"Macronix's loss is bigger than expected, but the lowered forecast isn't," said Eric Yeh (葉時雙), who manages US$600 million in stocks at Transcend Securities Investment Trust Co (傳山投信). "Nintendo's been under a lot of pressure from Xbox and PlayStation 2."
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