Powerchip Technology Corp (力晶), the nation’s biggest maker of computer memory chips, or dynamic random access memory (DRAM), yesterday said it plans to cut output to cope with oversupply after reporting weaker monthly sales.
Last month, Powerchip posted NT$5.86 billion (US$192 million) in sales, down 22 percent from the NT$7.52 billion reported in September, marking the lowest level since the NT$5.52 billion posted in February. On an annual basis, the results show a 38 percent expansion.
Powerchip blamed continuous drops in prices for the decline.
“To avoid the slump in prices hurting the bottom line, Powerchip will adjust capacity allocation,” spokesman Eric Tang (譚仲民) said in an e-mailed statement.
The Hsinchu-based chipmaker plans to allocate more capacity to its contract and non-standard DRAM businesses, in response to a short-term imbalance between DRAM supply and demand, Tang said.
The DRAM business is Powerchip’s major revenue source and occupies two-thirds of the chipmaker’s total capacity.
Meanwhile, Nanya Technology Corp (南亞科技), the nation’s -second-largest DRAM maker, said it would stick to its original production plan.
Last month, the chipmaker trimmed its output growth -target this year to 25 percent from last year, citing technological barriers.
Powerchip’s announcement came after its Japanese partner, Elpida Memories Inc, said it would slash semiconductor production by about 25 percent, citing an “abrupt” drop in prices.
Output, measured in terms of the 12-inch silicon wafers used in chip manufacturing, would drop to 170,000 units a month from 230,000 units, the Tokyo-based company said in a statement yesterday, Bloomberg reported.
Elpida will have to reduce production until February “at the very least,” president Yukio Sakamoto said.
“It’s unclear how far prices will decline,” he said. “We’re doing this to try to keep prices from falling further.”
Separately, Rexchip Electronics Corp (瑞晶電子), a DRAM maker in which Elpida has a 64 percent stake, yesterday reported NT$5.31 billion in net profit for the third quarter, after deducting first-half net profit of NT$9.09 billion.
That represents almost 6 percent growth from the NT$5.01 billion the Taichung-based chipmaker made in the second quarter.
Gross margin stood at 42 percent during the first three quarters, according to the company’s filing with the Taiwan Stock Exchange yesterday.
Powerchip owns 34 percent of Rexchip.
ADDITIONAL REPORTING BY BLOOMBERG
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