Memorychip producer Macronix International Co (旺宏電子) on Wednesday reported that although its gross margin grew sequentially by 6 percentage points last quarter because of an improved product mix, the company’s bottom line remains mired in the red.
The Hsinchu-based company, which supplies chips to Japanese video game console manufacturer Nintendo Co, reported net losses of NT$1.28 billion (US$42.2 million), or NT$0.36 in net losses per share, in the first quarter — its ninth consecutive loss-making quarter.
Despite extending its run of profitless quarters, Macronix did cut its losses on both a quarterly and annual basis in the first quarter of the year, with the producer of so-called ROM products and NOR flash memory chips reporting net losses per share of NT$0.42 in the previous quarter, compared with the NT$0.59 in net losses per share that it recorded a year earlier.
The company’s revenue totaled NT$4.79 billion in the first quarter, down 18 percent quarterly because of seasonally weak demand for ROM products, but sales increased 9 percent year-on-year in the January-to-March period, it said.
In the first quarter, flash memory accounted for 68 percent of Macronix’s overall revenue, while ROM products comprised 19 percent and its foundry business provided 13 percent.
The company’s first-quarter gross margin was much better than expected, reaching 18 percent due to an increase in shipments of high-margin products and improved factory utilization, Macronix chief financial executive Paul Yeh (葉沛甫) told investors in a Webcast presentation.
The 18 percent figure compares with the 12 percent gross margin that Macronix posted three months ago and the minus-4 percent the company made a year earlier.
Although Macronix’s operating margin decreased sequentially to minus-27 percent last quarter from minus-25 percent due to the fall in revenue, it was still better than the minus-47.6 percent the chipmaker posted a year ago.
Macronix has forecast a turnaround over the next 18 months and said it expects revenue to increase sequentially starting from this quarter after securing its first order for 4-gigabit single-level cell (SLC) NAND flash memory using its 36-nanometer technology last month, chairman and chief executive officer Miin Wu (吳敏求) said on Wednesday.
“SLC NAND flash memory and high-density NOR flash memory will be the company’s key long-term growth drivers,” Wu said.
As of March 31, the chipmaker had NT$9.63 billion in cash and cash equivalents, with a debt-to-asset ratio of 46.2 percent in the first quarter — less than the previous quarter’s 46.8 percent.
The company has budgeted capital spending of NT$2.5 billion for this year, but Wu said the figure might be adjusted upward to meet clients’ demand, without giving an exact number.
Macronix’s shares rose 0.85 percent to NT$7.11 on Wednesday in Taipei trading.
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