Thu, Apr 19, 2012 - Page 12 News List

Nanya upbeat on cutting losses

STILL IN THE RED:The firm expects chip prices to be higher this quarter, helping it to continue cutting its losses, which shrank to NT$10.39 billion in the first quarter

By Lisa Wang  /  Staff reporter, in Taoyuan

Nanya Technology Corp (南亞科技), the nation’s top PC DRAM chipmaker, yesterday said its quarterly losses narrowed slightly in the first quarter from the previous quarter as improving demand lent some support to chip prices, which bodes well for an even better recovery this quarter.

Losses shrank to NT$10.39 billion (US$352 million) in the first quarter, compared with losses of NT$11 billion in the final quarter of last year, after chip prices declined 2 percent quarter-on-quarter compared with a 12 percent decrease in the previous quarter.

On an annual basis, that was bigger than the NT$9.03 billion loss posted for the same period last year.

Extending that positive trend, chip prices should be higher this quarter than in the first quarter, as historical data shows that major clients usually start building inventory next month and in June for the holiday buying spree, company vice president Pai Pei-lin (白培霖) told a media briefing at the company’s headquarters in Taoyuan.

“January will be the worst month in terms of chip prices .... Demand looks OK since the US economy is apparently recovering,” Pai said. “This will help improve the company’s financial situation gradually ... The second quarter will be a better period than the first in terms of the bottom line.”

“The effect of Elpida Memory Inc [filing for bankruptcy protection] will loom large beginning in May, as Elpida is likely to supply less chips to the market [due to mounting financial pressure],” Pai said.

Pai said Nanya Technology did not make a bid for a stake in debt-ridden Elpida. He also said he did not expect any changes to happen if its technology partner, Micron Technology Inc, wins its bid to acquire part or all of the Tokyo-based memory chipmaker.

This quarter, output is expected to grow by more than 10 percent from the first quarter as the company’s joint venture with Micron, Inotera Memories Inc (華亞科技), plans to expand output by up to 35 percent quarter-on-quarter by migrating more capacity to make chips using next-generation 30-nanometer technology.

Inotera expects 30-nanometer chips to account for about a third of its capacity by the middle of this year after it started mass production last month.

Inotera yesterday said its losses improved to NT$4.45 billion in the first three months, from loss of NT$6.03 billion in the fourth quarter of last year. That compares with losses of NT$4.04 billion in the first quarter of last year.

President Charles Kau (高啟全) said a 10 percent increase in chip prices and a bigger revenue contribution from higher-priced server DRAM have helped improve its operating margin to minus-55 percent last quarter from minus-65 percent in the fourth quarter.

Server DRAM, which enjoys an average 80 percent price premium, made up 20 percent of Inotera’s revenues of NT$7.93 billion, up 8 percent from the previous quarter, Kau said.

Inotera aims to expand its server DRAM and mobile DRAM businesses to about half of the company’s total output at the end of this year, Kau said. It also plans to ramp up production of memory chips used in mobile devices, such as tablets and Ultrabooks.

Nanya Technology yesterday kept its capital spending forecast unveiled three months ago unchanged at NT$3.4 billion. The figure is a third of the NT$10.9 billion it spent last year.

Inotera plans to spend NT$4 billion this year.

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