DRAM chipmaker Inotera Memories Inc (華亞科技) yesterday reported a record profit for last quarter and said it would more than double its capital spending to NT$50 billion (US$1.65 billion) next year to accelerate the development of 20-nanometer (nm) chips.
It would make it the company’s biggest instance of capital spending since 2010, when it invested NT$55 billion to increase its capacity and upgrade its equipment.
This year, Inotera budgeted NT$22 billion in capital spending, mainly for the 20nm technology upgrade.
“It’s bigger than we expected, for a couple of reasons,” Inotera president Scott Meikle told a media briefing.
“It is very important that we deliver the 20nm volume at the right time for the right costs. So we have to adjust our capex to meet that demand,” he said.
Inotera believes it has sufficient capital to fund the upgrade, since it has NT$44 billion in cash plus NT$15 billion of operating cash generated last quarter.
The company, a DRAM joint venture between Micron Technology Inc and Nanya Technology Corp (南亞科技), expects to ramp up production of 20nm chips in the second quarter of next year, rather than next quarter.
Net profit grew 9.51 percent to NT$11.63 billion last quarter, compared with NT$10.62 billion in the second quarter, an increase of 59.53 percent from NT$7.29 billion a year ago.
Gross margin slid to 53 percent last quarter from the second quarter’s 56 percent.
Inotera expects the average selling price (ASP) to remain stable this quarter from last quarter, after declining 3 percent sequentially last quarter.
Wafer production would be flat this quarter from last quarter, indicating a smooth migration from 30nm technology to 20nm, the chipmaker said.
Separately, Nanya Technology said net profit soared to an all-time high of NT$7.46 billion last quarter, which represented a sequential growth of 22.7 percent from NT$6.08 billion.
Gross margin also hit a historic high of 47.8 percent, up from 43.8 percent a quarter ago and from 14 percent a year ago as ASP climbed three percent sequentially and shipments rose 7.3 percent.
The strong quarterly earnings has helped the company erase all accumulated losses over past years and swing into net profit of NT$2.21 billion as of last quarter.
That paves the way for the company to begin paying dividends next year.
“There is a high likelihood [that the company will distribute dividends],” company spokesman Lee Pei-ing (李培瑛) told a media briefing.
This quarter, blended ASP is expected to drop by between 3 percent and 5 percent from last quarter, due to declining prices in memory chips used in consumer electronics such as TVs and set-top boxes, Lee said. Wafer shipments would hold steady, he said.
Memory chips used in consumer electronics are the biggest revenue source for the firm, accounting for about 60 percent of its total revenue of NT$13.09 billion last quarter.
“The fourth-quarter results will be very similar to the company’s second-quarter figure,” Lee said.
Nanya Technology plans to spend NT$6.69 billion this year on new equipment, primarily for upgrading to 30nm technology, and it plans to spend less next year.
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