Nanya Technology Corp (南亞 科技), the nation's No.2 maker of memory chips for computers, yesterday posted a lower-than-expected quarterly result, but said it expected a rebound to set in largely due to strong demand for computers in the current quarter.
Nanya Technology said earnings in the three-month period to last month stood at NT$2.16 billion, or NT$0.6, versus a loss of NT$169 million a year earlier.
Revenue expanded to NT$10.53 billion over the same period.
The result, however, represented a decline of around 28 percent from NT$3 billion earned in the second quarter after prices of dynamic random access memory (DRAM) chips fell to average US$4.5 per unit last quarter from its peak in the second quarter.
"The third-quarter earnings are well below my expectations," said Charlie Chen (陳思旭), an analyst with Grand Cathay Securities Co (
He expected Nanya Technol-ogy's third-quarter net income to remain flat at around NT$3.1 billion on the assumption that the chipmaker's shipment would grow fast enough to offset the pressure of price erosion.
The Taoyuan-based chipmaker said price decline had driven down its gross margin to 38 percent last quarter, from 43 percent in the second quarter.
The situation will improve in the fourth quarter, helped by the traditional peak season in the personal computer sector, said George Wu (吳裕良), a fund manager at Invesco Taiwan Ltd.
"The fourth quarter will be a booming season for the DRAM sector. Taiwanese companies have a good opportunity as their rivals are shifting to NAND flash memory chips for handsets, or sensors," he said.
Wu said he expects DRAM prices to rise to US$5 per unit in the quarter.
"We believe chip supply will be tight as messages from our customers showed that demand will be exuberant in the fourth quarter, mostly due to growing computer replacement from corporations," Nanya Technology vice president Pai Pei-lin (白培霖) said.
He said they saw early signs last month after sales hit a record high at NT$3.7 billion.
The company has a chance to break the record this month, Pai said.
Strong demand will also push DRAM prices higher by around 3 percent in the second half of this month on the contract market af-ter hiking chip prices earlier this month, he added.
The 256-megabit, 400-megahertz double-data-rate DRAM chip is expected to trade between US$4.65 to US$5.10 in the spot market until Oct. 26, the Taiwan-based DRAMexchange said on its Web site.
Nanya Technology currently sells 70 percent of its chips to international computer vendors, including Dell, on a contract base.
In the current quarter, Nanya Technology is expected to expand its output by 30 percent at a quarterly rate and the growth may translate into a sales increase, if chip prices hold steady at US$4.5 per unit, Pai said.
Most of the output increase will come from a cost-saving 300mm fab owned by Inotera Memories Inc (華亞半導體), a 50-50 joint venture between Nanya and Infineon Technologies AG of Germany, he said.
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