Nanya Technology Corp (南亞科技) posted 55 percent sequential growth in net income for last quarter as gross margin climbed due to cost reduction, higher chip prices and an improved product portfolio.
Net income soared to NT$6.12 billion (US$202 million) in the quarter ending March 31, compared with NT$3.96 billion in the final quarter of last year, hitting the strongest level in 29 quarters.
On an annual basis, the figure was a spike from NT$526 million.
Gross margin surged to 39.9 percent last quarter from 17.8 percent a quarter earlier and 12 percent a year ago. Average selling price (ASP) increased 2.6 percent sequentially and 38.1 percent annually.
The chipmaker said unit cost improved 20.9 percent sequentially after cost-effective 30-nanometer chips increased to a 70 percent share of its output from 35 percent.
“We feel that the DRAM market is better than we originally expected based on customer feedback. This quarter will not be as slow as it used to be,” Nanya spokesman Lee Pei-ing (李培瑛) told reporters.
“Demand is driven by various applications from Internet of Things, servers, smartphones, tablets, wearable devices to set-top boxes,” Lee said. “The expiration of Microsoft Corp’s Windows XP operating system also spurred demand for DRAM chips.”
“The price is stabilizing in April,” Lee said.
ASP is expected to rise by 5 percent in the next two months and we expect the price to gradually increase in the second quarter, he said.
“The third quarter will be encouraging,” Lee said. “This year will be a very good year for DRAM suppliers, especially Nanya.”
The company aims to increase better-margin non-PC DRAM chip revenue contribution to 80 percent by the end of this year from 73 percent last quarter.
Nanya yesterday said it plans to increase its capital spending to NT$6.69 billion this year, from NT$3.05 billion estimated earlier this year, by buying a new emersion tool to improve technology efficiency.
Inotera Memories Inc (華亞科技), a DRAM joint venture between Nanya and US chipmaker Micron Technology Inc, yesterday posted NT$11.25 billion in net profit for last quarter, up 2 percent from NT$11.05 billion in the previous quarter.
Inotera raised its capital spending this year to NT$22 billion from an earlier estimate of NT$15 billion, mostly on mass production of 20-nanometer technology by the end of this year.