Fri, Oct 20, 2006 - Page 12 News List

ProMOS' Q3 income sets record

FINE THREE MONTHS The nations No. 3 chipmaker said increased production and rising prices for DRAM had contributed to a 29-fold increase in quarterly incomes

By Jessie Ho  /  STAFF REPORTER

ProMOS Technologies Inc (茂德科技), the nation's third-largest maker of computer memory chips, said its third-quarter net income reached NT$5.91 billion (US$177.89 million), or NT$1.12 per share, according to a statement filed to the Taiwan Stock Exchange yesterday.

The NT$5.91 billion net income represents a quarterly figure record and is more than 29 times the amount it reported during the same period of last year.

Revenues totaled NT$18.23 billion in the third quarter, up 135.8 percent from NT$7.73 billion a year earlier, driven by increased production using 90-nanometer processing technology and rising prices for dynamic random access memory (DRAM) chips, ProMOS said.

The company reported NT$11.65 billion revenues for the second quarter and NT$7.91 billion for the first quarter.

NT$1.23 per share

For the first nine months ending Sept. 30, the company's revenues totaled NT$37.812 billion, with net profit of NT$6.48 billion, or NT$1.23 per share, according to the Hsinchu-based company.

Its gross margin, 41.58 percent in the third quarter, up from 24.52 percent in the previous quarter, was attributable to lower marketing costs, declining DRAM chip prices and increased efficiency in 90-nanometer production, the Chinese-language Web site cnYES.com reported yesterday, citing ProMOS spokesman Ben Tseng (曾邦助).

The company achieved a gross margin as high as 47 percent last month, the report added.

Last week, the nation's largest memory chipmaker, Powerchip Semiconductor Corp (力晶半導體), reported an all-time high third-quarter net income of NT$7.79 billion, or NT$1.29 per share.

Looking ahead, ProMOS said it expected the growth momentum to extend into the three months between this month and December, with rising demand for personal computers, mobile phones and game players that need more memory to process data.

ProMOS shares dropped 1.15 percent to NT$12.95 on the GRETAI Securities Market yesterday, underperforming against the benchmark TAIEX, which showed a 0.31 percent decline.

Buy Rating

But Goldman Sachs maintained a "buy" recommendation and a 12-month target price of NT$19 on ProMOS on return-on-equity recovery from 11 percent this year to 21 percent next year.

The American investment firm estimated ProMOS would earn NT$1.17 per share this year, and NT$2.8 next year and NT$3.28 for 2008, Helen Huang (黃玉惠), executive director of Goldman Sachs' Asia-Pacific Investment Research, said in a report released yesterday.

ProMOS earned NT$0.19 per share last year.

The market is concerned about an oversupply next year, after Samsung Electronics Co, the world's top chipmaker, said on Wednesday that its DRAM growth for next year will be 90 percent to 95 percent from this year.

The worst case scenario for the market would be for demand to increase 55 percent while supply grows 60 percent, but Huang said the possibility of that scenario is below 10 percent.

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