Fri, Jul 31, 2009 - Page 11 News List

Macronix raises shipment forecast for third quarter

MARKET SHARE: The Hsinchu chipmaker shrugged off the re-emergence of US rival Spansion, which said it would be out of bankruptcy protection this year

By Kevin Chen  /  STAFF REPORTER

Macronix International Co (旺宏電子) yesterday raised its shipment forecast for this quarter on rising flash memory demand, while dismissing market concerns of competition from US rival Spansion Technology Inc.

Spansion, which filed for bankruptcy protection in March, announced overnight that it planned to emerge from a Chapter 11 filing by the fourth quarter of this year, raising concerns for Macronix’s order outlook.

“The inventory is still big at Spansion and that was not positive for the industry during the first half of the year,” Macronix president Lu Chih-yuan (盧志遠) told investors yesterday via a Webcast.

“But if Spansion can maintain healthy operations [after it emerges from bankruptcy protection] and become more prudent in its business management, we believe this will be positive for the industry in the long term,” Lu said, dismissing a local newspaper report that a restructured Spansion would hurt his company.

Shares of the Hsinchu-based memory chipmaker that counts Nintendo Co among its clients dropped 4.09 percent to NT$17.6 on the Taiwan Stock Exchange yesterday, before its second-quarter financial results and business guidance for this quarter were released.

Macronix produces ROM products and NOR flash memory. In the second quarter, flash memory accounted for 52 percent of the company’s total revenue, ROM products comprised 38 percent and 10 percent came from FBG-related foundry business.

For the current quarter, Lu said shipments of blended products were likely to increase between 10 percent and 15 percent from the April-June period, which is lower than a 52 percent quarterly increase in the second quarter.

Macronix also projects a flat growth to 5 percent increase in average selling prices (ASP) for blended products, helped mainly by an expected strong demand for ROM products in the third quarter. The company saw a quarterly decline of 26 percent in ASP in the second quarter.

“The second-half of the year is expected to be a high season for ROM products, which usually carry a higher ASP,” said Paul Yeh (葉沛甫), Macronix’s chief financial officer.

The company was also upbeat about its capacity utilization rate for this quarter, forecasting it would stay above 95 percent this quarter. The rate was 99 percent in the second quarter and 47 percent in the first quarter.

Lu, however, declined to offer a projection for gross margin for this quarter. Gross margin for the second quarter was 40 percent, better than 36 percent in the first quarter but the same level as the previous year, a company statement said.

In the second quarter, the company posted NT$980 million (US$29.8 million) in net income, up 57.1 percent from NT$624 million in the first quarter and 15.8 percent from NT$846 million a year earlier.

Earnings per share were NT$0.31 in the second quarter, up from NT$0.20 in the first quarter and NT$0.27 a year ago.

Revenue totaled NT$5.77 billion in the second quarter, up 17 percent from the previous quarter and up 11 percent from the previous year, the company said.

Macronix has maintained its capital expenditure at around NT$1 billion to NT$1.5 billion for this year, Lu said. As it has no big spendings plan for equipment, it has only used about NT$500 million in capital expenditure funds this year, he said.

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