The nation's computer memory chipmakers, led by Powerchip Semiconductor Corp (力晶半導體), may report sharp declines in quarterly earnings amid falling chip prices and lukewarm back-to-school demand, analysts said yesterday.
Taiwanese memory chipmakers are likely to report weaker third-quarter results than their bigger Korean rival Samsung Electronics Co, which has a wider product portfolio, said Wang Bou-li (
Samsung Electronics, the world's biggest memory chipmaker, yesterday told investors that earnings for the July-September period slid 30 percent from the same period last year on lower chip prices.
"Falling prices also eroded local chipmakers' gross margins," Wang said. "Besides, seasonal back-to-school demand is slower than expected," he said.
Powerchip, Taiwan's biggest maker of dynamic random access memory (DRAM) chips, may report an 80 percent plunge in its third-quarterly earnings, from NT$6.98 billion (US$209 million) to NT$1.5 billion a year earlier, Wang said.
Earnings per share will also decline to NT$0.35 from NT$1.71, according to Wang's projection.
Gross margins could slide to around 20 percent, from some 50 percent during the third quarter of last year, after prices of DRAM chips recently plunged around 44 percent year-on-year to US$2.4 per unit, Wang said.
Powerchip is scheduled to release its third-quarter results on Monday, and rival Nanya Technology Corp's (
Despite the drastic decline, Wang said "the result is not too bad for chipmakers like Powerchip who only make standard DRAM chips -- unlike Samsung, which can rely on NAND flash chips to boost its margins."
DRAM chips are mostly used in personal computers, while NAND flash chips are used in consumer electronics such as digital music players and digital cameras.
Another analyst with Barits International Securities Co (倍利投信), who asked not to be named, said that "at least, profits are recovering after prices of DRAM chips rebounded from the second quarter."
Samsung yesterday said DRAM prices bounced back by around 8 percent in the third quarter from the previous one. Looking forward, it expects prices to drop less than 5 percent in the current quarter on strong demand.
Nanya Technology, Taiwan's No. 2 DRAM maker, may also post lower third-quarter results, down nearly 50 percent to NT$1.1 billion, the Barits analyst said. The decline in earnings may be blunted somewhat by Nanya's memory chipmaking venture Inotera Memory Inc (
Earnings per share will fall to NT$0.29, he said. Nanya Technology mostly supplies chips to computer vendors such as Dell Inc.
Inotera now makes chips at a cutting-edge 300mm (or 12-inch) plant -- so named because circuits are printed on round 300mm wafers which are then sliced into individual chips. Older plants print chips on smaller wafers, which is less cost-effective.
The company plans to build a second plant after raising funds through an initial public offering at home and a share sale overseas next year.
Powerchip yesterday signed a NT$15 billion syndicated loan with local banks led by Cathay United Bank (
Powerchip is aggressive in building such advanced factories. The company plans to build two such fabs every three years, unlike Nanya, which does not have its own 300mm fab.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to