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Nanya Technology sales rise on higher chip prices

Nanya Technology Corp (南亞科技), the nation’s top computer memory chipmaker, yesterday posted its highest monthly sales in nearly three years, bolstered by a strong recovery in demand, mainly from China, which pushed chip prices higher last month.

Sales last month soared 75 percent to NT$5.68 billion (US$174 million), from NT$3.24 billion last year, the company said in a statement. That marked its highest monthly sales since January 2007, when Nanya made NT$6.52 billion.

On a month-on-month basis, sales rose 24 percent, aided by a 25 percent hike in the prices of dynamic random access memory (DRAM) chips last month.

Nanya aims to raise prices for benchmark double-data rate 2 (DDR2), chips by another 20 percent this month amid supply constraints, company spokesman Pai Pei-lin (白培霖) told reporters last month.

Pai said PC replacement demand among small and medium corporations had boosted sales. Corporate demand had lagged consumer spending on PCs earlier this year.

He expects to see a broader PC replacement demand next year, with the launch of Microsoft Corp’s new Windows 7 system.

Smaller rival Powerchip Semiconductor Corp (力晶半導體) said on Monday that sales last month grew 63 percent year-on-year, or 28 percent month-on-month, to NT$4.24 billion, setting a 14-month high since August last year.

With prices on the rise, Powerchip said it planned to boost factory utilization to 100 percent by the end of the year, which, along with steady chip price hikes, would help it return to profit this quarter, company spokesman Eric Tang (譚仲民) said.

The spot price for benchmark 1-gigabyte DDR2 chip is expected to hold steady next year at US$2 to US$2.50 per unit, which would allow Powerchip to generate sufficient cash for operations, it said in a company statement.

As such, the board of Powerchip will not ask for an extension of special credit terms when they expire at the end of the year.

Under the terms, Powerchip only paid monthly interest on bank loans after obtaining a six-month grace period twice since the beginning of the year to repay the loan principal.

Next year, Powerchip would pay back loans normally, Tang said.
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