Sat, Aug 11, 2007 - Page 12 News List

ProMOS posts losses in Q2 on weak DRAM pricing

By Lisa Wang  /  STAFF REPORTER

ProMOS Technologies Inc (茂德 科技), the nation's third-biggest maker of computer memory chips, swung into losses last quarter as prices plunged on oversupply, but said prices and shipment would recover this quarter.

During the quarter ending June 30, ProMOS posted a net loss of NT$3.83 billion, or a loss of NT$0.58 per share, compared with a net profit of NT$1.09 billion, or NT$0.22 per share, a year ago.

"The worse-than-expected performance in the second quarter of fiscal 2007 was mainly due to DRAM price erosion," said Ben Tseng (曾邦助), a vice president at ProMOS.

Prices have plunged about 60 percent since the beginning of the year, he said.

Tseng was optimistic, though, that "the darkest period is over as we have seen a recovery in July and August."

"DRAM prices have hit the bottom and started to pick up," Tseng said, echoing the optimism of local rivals Powerchip Semiconductor Corp (力晶半導體) and Nanya Technology Corp (南亞科技).

He said that PC vendors have started building inventory in anticipation of the pickup in the third quarter, and demand for DRAM chips should rise in line with the growing uptake of Microsoft Corp's new Vista system later this year.

For the first half of the year, ProMOS eked out a net profit of NT$504 million, or NT$0.08 a share, down 11 percent from NT$568 million, or NT$0.11 a share, in the same period last year. Sales, however, jumped more than 40 percent to NT$27.6 billion.

Wafer shipments are expected to grow 30 percent sequentially during the third quarter, with the increasing shift to 70-nanometer process technology from 90-nanometer that would allow it to cut more chips from a single 12-inch wafer, he said.

The company has also raised its shipment growth target slightly to 90 percent annually, from 85 percent before, citing faster technology migration, he said.

Target capital spending is unchanged at US$1.88 billion for this year, he said.

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