Thu, Jul 19, 2012 - Page 13 News List

Nanya counts on cloud to boost revenue

BALANCING DEMAND:Spokesman Lee Pei-ing said the firm may consider cutting some chip output, but foresees rising demand for non-PC chips, including DRAM

By Lisa Wang  /  Staff reporter, in Taoyuan

Nanya Technology Corp (南亞科技), the nation’s top DRAM chipmaker, expects its quarterly loss to improve for a second consecutive quarter amid hopes that growing demand for non-PC electronics such as cloud-computing servers would offer some upside in chip prices after PC demand stalled, a company executive said yesterday.

Nanya Technology also said its partnership with US-based Micron Technology Inc in developing next-generation process technologies and products would be unchanged — based on a 10-year agreement that runs through April 2017 — even after Micron acquired Japan’s Elpida Memory Inc, company spokesman Lee Pei-ing (李培瑛) said.

PC demand this quarter would be “below seasonal norms,” Lee said, buckling the uptrend in the back-to-school shopping season and reflecting customers’ conservative outlook amid global economic uncertainty.

To balance chip demand and supply, Nanya Technology would consider shifting some PC DRAM capacities to make non-PC memory chips, Lee said. Now its factories are fully operational, he said.

However, Lee expects growth in other areas, including DRAM chips used in servers, tablets, digital TVs and other consumer electronic products. That would boost contribution from non-PC chips from 45 percent last quarter to as high as 50 percent this quarter.

Non-PC chips are about 70 percent more expensive than PC chips.

“Overall, the third quarter will be a flat season,” Lee said. “Chip prices may have a mild increase this quarter from the second quarter ... We hope our losses will improve slightly this quarter.”

In the April-to-June period, Nanya Technology narrowed its loss to NT$6.69 billion (US$223 million), compared with a loss of NT$10.39 billion in the first quarter and a loss of NT$7.9 billion in the corresponding period of last year, as PC inventory buildup demand pushed up prices by 10 percent sequentially, the company said.

On an annual basis, chip prices plunged 39 percent, the firm said. Shipments expanded 6 percent quarter-on-quarter last quarter, or an annual growth of 42 percent, it said.

This quarter, output is expected to increase 25 percent sequentially, Lee said.

Inotera Memories Inc (華亞科技), a DRAM joint venture between Nanya Technology and Micron, also posted smaller quarterly losses at NT$2.98 billion yesterday, compared with a loss of NT$4.45 billion in the first quarter and loss of NT$3.91 billion in the second quarter of last year.

Company president Charles Kau (高啟全) expected the loss to shrink this quarter as rising demand for DRAM chips used in servers and tablets would lift chip prices, offsetting short-term stagnation in the PC area.

DRAM chips for servers accounted for more than 20 percent of the company’s shipments.

Kau expected sales of Ultrabook computers and computers equipped with Microsoft Corp’s new Windows 8 operating system to inject some life into the PC DRAM chip business later this quarter.

Since Micron also plans to acquire Rexchip Electronics Crop (瑞晶電子), a joint venture between Elpida and Powerchip Technology Corp (力晶科技), there would be lots of integration in capacities between Rexchip and Inotera after the middle of next year following the close of the Micron-Elpida deal, according to Scott Meikle, executive vice president of Inotera.

However, there is no concrete plan for Inotera to make anything other than DRAM chips in its factories, Meikle said.

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