Nanya Technology Corp (南亞科技) yesterday said it aimed to write off its remaining losses of NT$17.4 billion (US$578 million) this year, paving the way for the world’s No. 4 DRAM chipmaker to distribute dividends again next year.
However, this means that Nanya has to make more than NT$17.4 billion in net profit this year. In the first four months of the year it earned NT$7.81 billion.
Shareholders yesterday approved the board of directors’ proposal to cancel 90 percent of the company’s capital shares, reducing them to 23.96 billion shares, in an effort to eliminate a big chunk, or about NT$215.65 billion in accumulated losses.
“After the capital reduction, it is very likely that Nanya will be able to clear all of its accumulated losses this year. The company might consider paying dividends again,” company chairman Wu Chia-chau (吳嘉昭) told shareholders.
Nanya has not paid dividends since 2007 as oversupply and falling prices have driven the firm into deep losses.
Corporate officials appear confident the company will be able to become profitable this year, given improving industry environment.
“This year will be a healthy year for the DRAM industry. Prices will not be as volatile as they used to be as supply growth decelerates,” Nanya spokesman Lee Pei-ing (李培瑛) told reporters.
Lee said he is optimistic about the business next quarter due to seasonal uptick in demand and slower-than-expected growth in chip supply.
“Slow 20-nanometer chip output [from global suppliers] has capped supply growth, while PC sales have started picking up this year, beating the industry’s expectation of a constant decline,” he said.
The company has to allocate more capacity for PC DRAM chips to cope with customer demand, Lee said.
Due to improved demand, chip prices began to pick up in April, two months earlier than the company expected, he said.
As a result, the company’s average selling prices (ASP) would likely rise by 2 percent next quarter from this quarter.
Revenue rose 12.68 percent to NT$4.16 billion last month from NT$3.69 billion in April, the highest in four months, thanks to a 1.2 percent sequential rise in ASP and 11.75 percent growth in shipments, Nanya said.
Inotera Memories Inc (華亞科技), a DRAM joint venture between Nanya and US chipmaker Micron Technology Inc, yesterday reported 5.86 percent growth in revenue for last month to NT$7.41 billion, from April’s NT$7 billion. The figure was the highest since the NT$8.15 billion posted in December last year.
Inotera said it made NT$3.69 billion in net profit last month, after deducting NT$3.53 million in foreign exchange losses, according to a filing submitted to the Taiwan Stock Exchange. Gross margin stood at 57.1 percent last month.
Regulators asked Inotera to disclose its monthly financial results after its stock skyrocketed 36.54 percent during the six trading days from May 28 to Thursday.
Inotera shares fell 6.48 percent yesterday to close at NT$50.5.
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