Powerchip Semiconductor Corp (力晶半導體), the nation’s No. 2 computer memory chipmaker, yesterday reported its second straight quarterly profit of NT$3.54 billion (US$112 million), bolstered by a sustainable recovery in PC demand that lifted chip prices to record highs.
The company added that it would raise capital spending by 18 percent to about NT$13 billion this year from its previous budget of NT$11 billion to accelerate technology migration to produce cost-efficient DDR3 chips, which is replacing DDR2 as the mainstream PC memory chips.
First-quarter earnings were nearly double the NT$1.6 billion Powerchip made in the final quarter of last year, when the chipmaker ended 10 consecutive quarters of losses and led its local peers in emerging from the industry’s longest and severest downturn.
In the first quarter of last year, Powerchip posted a loss of NT$6.29 billion, the company said in a filing to the Taiwan Stock Exchange.
Rising DRAM chip prices, together with Powerchip’s “smooth capacity revival and a further increase in the [sales ratio] of higher-margin DDR3 products led to the turnaround in operations,” Powerchip spokesman Eric Tang (譚仲民) said in a company statement released yesterday.
Gross margin and operating margin bounced back to 27 percent and 22 percent respectively in the first three months, the statement said. The company did not provide comparative figures.
Demand in the second quarter “looks quite good,” Tang told reporters after a media briefing yesterday.
“Sales will increase month on month ... as customers’ orders indicate,” Tang said.
To cope with the increasing demand, Powerchip aims to make chips using more advanced and cost-efficient 63-nanometer technology next quarter at the earliest, Tang said.
Separately, Powerchip’s board yesterday approved a proposal to cut the company’s capital by 38 percent, or NT$34.38 billion, to improve its financial structure. After the adjustment, the chipmaker will have NT$56.09 billion in capital.
The capital reduction program is expected to boost the net value of Powerchip to NT$6.90 per share, from NT$3.31 a share at the end of last year, Tang said.
The board also approved a proposal to issue 800 million new shares — to be sold either domestically or abroad via global depositary receipts — and a private placement of 300 million new shares to raise funds to purchase equipment and materials, as well as repay debt. The proposal is subject to shareholders’ approval on May 26.
Rival Nanya Technology Corp (南亞科技), the nation’s top DRAM supplier, is scheduled to release its first quarter results today.
The contract price of benchmark DDR2 chips edged lower by 0.2 percent to US$2.97 per unit yesterday, which is still higher than this month’s contract price of US$2.44 per unit, Taipei-based market research firm DRAMeXchange Technology Corp (集邦科技) said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS