Nanya Technology Corp (南亞科技), Taiwan’s second-largest memory-chip maker, posted a wider-than-estimated loss as a continued slump in computer demand hurt sales.
Third-quarter losses widened to NT$12 billion (US$399 million) from NT$2.27 billion a year earlier, the Taoyuan-based company said in a statement yesterday.
The average of eight analysts’ estimates compiled by Bloomberg was for a NT$8.4 billion loss. Inotera Memories Inc (華亞科技), Nanya’s Taoyuan-based venture with Micron Technology Inc, posted a NT$7 billion loss.
Europe’s debt crisis, a slow US economy and the popularity of tablet devices such as Apple Inc’s iPad have weighed on demand for memory chips used in computers. Prices of DRAM chips have dropped 32 percent during the quarter, Nanya said in a statement.
“The situation is particularly terrible, but once it’s over the industry will be more stable,” Charles Kau (高啟全), president of Inotera, said at a news conference yesterday. “It’s bad, but it’s all bad for all companies.”
Shares of Nanya climbed 1.6 percent to NT$3.84 at the close of trade in Taipei yesterday before the announcement was made, stemming its fall this year to 76 percent. Inotera advanced 0.3 percent to NT$6.16, paring its decline this year to 56 percent.
Nanya’s third-quarter revenue dropped 51 percent from a year earlier to NT$7.3 billion, while Inotera’s fell 10 percent to NT$8.9 billion. The losses at Nanya and Inotera were their seventh in succession. The average of nine analyst estimates compiled by Bloomberg was for a loss of NT$3.7 billion at Inotera.
Nanya’s shipments, measured in bits, dropped 7 percent from the prior quarter, the company said in the statement.
That figure will climb 5 percent to 10 percent in this quarter from the prior three-month period, it said.
“The global DRAM market was affected by disappointing economic growth and chip oversupply in 2011, chip prices have been on a downward slide since the beginning of the year,” Taipei-based Trendforce Corp’s (集邦科技) DRAMeXchange research unit said in a statement on Wednesday last week. “As the market remains in a state of oversupply, conservative attitudes toward contract prices will continue to prevail.”
Nanya expects to complete a private placement of up to 15 billion new common shares by the end of next month, it said in the statement. Spending on equipment and facilities this year would be NT$12 billion, it said, reiterating an earlier estimate.
Shipments at Inotera would climb 15 percent to 20 percent this quarter from the previous one, the company said.
Inotera’s spending on equipment and facilities would drop to NT$12 billion this year from an earlier forecast of NT$17 billion, Inotera said. It has already spent NT$11.3 billion in the first nine months of the year, the company said.
Inotera has NT$2 billion in debt payments due this quarter and a further NT$25 billion in the first half of next year. It had NT$700 million in cash at the end of last month, Kau said.
Formosa Plastics Group (台塑集團), Nanya’s founding shareholder, has approved Inotera’s plan for a rights issue of 1.1 billion shares next month, Kau said.
“Shareholders know how critical this is,” Kau said.
Inotera will cut costs through improved efficiency and lower material prices, while there would be no reduction in the number of workers, he said.
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