Mon, May 13, 2013 - Page 14 News List

DRAM supply shortage to last until year-end: Inotera

Staff writer, with CNA

The shortage in the supply of DRAM chips is likely to continue until at least the end of this year amid high demand for smartphones and tablet computers, memorychip maker Inotera Memories Inc (華亞科技) said.

On the sidelines of the company’s annual general meeting on Friday, Inotera chairman Charles Kau (高啟全) said the DRAM supply shortage in the high-tech sector could even continue into next year.

DEMAND PICK UP

Amid rising demand and DRAM companies’ efforts to reduce production of commodity chips, the average price of the benchmark DDR3 4GB DRAMs rose 13 percent in the second half of last month from a month earlier, according to DRAMeXchange, a research division of Taiwan-based TrendForce Corp (集邦科技).

DRAMeXchange said the average price of DDR3 4GB DRAMs has jumped about 70 percent in the past five months after demand for DRAMs started to pick up, reversing a long period of sluggishness caused by oversupply.

Inotera, a DRAM manufacturing arm of the Formosa Plastics Group (FPG, 台塑集團), reported last week its revenue for last month was little changed at NT$3.45 billion (US$116 million) from March, but grew 14.8 percent from NT$3 billion for the same month of last year, thanks to rising chip prices.

IMPROVEMENTS

With the global DRAM market improving, Inotera’s bottom line is expected to continue to strengthen in the second quarter, Kau said, adding that company might have a much better second quarter than the first quarter.

In the first quarter, Inotera posted NT$613 million in net loss, or NT$0.11 in loss per share.

However, this was an improvement from NT$3.72 billion in net loss or NT$0.69 in loss per share in the fourth quarter of last year.

Nanya Technology Corp (南亞科技), another DRAM production unit of FPG, turned a profit in the first quarter, posting NT$506 million in net profit or NT$0.02 in earnings per share.

In the fourth quarter, Nanya Technology incurred NT$8.88 billion in net loss or NT$0.45 in loss per share.

Nanya Technology said its average selling price for the first quarter rose 30.5 percent from the fourth quarter, and 12.8 percent from a year earlier.

Meanwhile, Inotera said its shareholders have approved a proposal for the company to make a private placement to sell up to 2.4 billion shares to raise funds for future expansion.

PRIVATE PLACEMENT

Inotera, which is a joint venture between Nanya Technology and US-based Micron Technology Inc, said the two major shareholders are expected to take up the shares in the private placement.

Encountering years of DRAM oversupply before market conditions started to improve five months ago, Inotera had accumulated net losses of NT$74.18 billion as of the end of last year, it said.

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