Powerchip Semiconductor Corp (力晶半導體), the nation's top maker of computer memory chips, posted a nearly quadrupled net income for the second quarter on significant growth in output and further cost reduction.
In the second quarter, Powerchip earned NT$3.18 billion (US$96.79 million), or NT$0.58 per share, a significant growth from NT$850 million in net income, or NT$0.07 a share, a year ago as output more than doubled.
The growth momentum would be even stronger this quarter due to constant capacity expansion and stabilizing chip prices on anticipated supply constraint, the company's chairman Frank Huang (
"Price cuts in CPU and back-to-school demand in August will further stimulate computer demand," Huang said.
Last year, Powerchip only had one 8-inch factory and one 12-inch factory in operation, but this year, it has opened a new 12-inch plant using cost-saving 90-nanometer processing technology, the company said.
Huang's comments were in line with smaller rival Nanya Technology Corp's (
"The third quarter will be much better than the second," Huang said.
Revenues and gross margin would improve month by month during the July-September period, he said.
Powerchip reported approximately 65 percent growth in revenues to NT$18.79 billion for the second quarter, from NT$11.37 billion a year earlier.
This quarter output for computer memory chips would increase another 14 percent at a quarterly rate, Huang said.
Also, chip prices were expected to stabilize, or even rise slightly at around US$4.50 to US$5 a piece for faster chips with more memory, which would bring respectable profits for Powerchip, he said.
"The company gave quite a good outlook, though the second-quarter results are disappointing. The news, overall, may have a positive impact on the company's stock price," said Wang Bou-li (
Wang had projected Powerchip would earn NT$3.4 billion during the three-month period ended last month.
"The company's gross margin is lower than my expectation," Wang said.
Powerchip posted 24 percent in gross margin for the April-June quarter, but the company said the margin improved to 28 percent, catching up with Nanya Technology.
The nation's No. 2 computer memory chipmaker reported 28 percent in gross margin for the second quarter and better net income of NT$3.7 billion, or NT$0.95 a share.
Powerchip shares fell 2.69 percent to NT$21.7 on the nation's over-the-counter Gretai Securities Market yesterday, while Nanya Technology shares dropped 0.68 percent to NT$21.95 on the Taiwan Stock Exchange.
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