Fri, May 01, 2015 - Page 14 News List

Powertech eyeing revenue growth on DRAM demand

STRONG ORDERS:The firm’s president said that sales of flash memory products, accounting for 40 percent of total revenue last quarter, would continue to grow

By Lauly Li  /  Staff reporter

Powertech Technology Inc (力成), a memorychip tester and packager, yesterday said revenue this quarter is expected to grow by between 5 percent and 10 percent from last quarter’s NT$9.43 billion (US$306.65 million) on the back of strong demand for DRAM for mobile devices and graphics.

Sales for last month outpaced the NT$3.28 billion made in March, president Hung Jia-yu told an investors conference.

Sales of flash memory products accounted for 40 percent of Powertech’s total revenue last quarter, and is expected to grow this quarter and next quarter, due to strong orders for high-end smartphones from Powertech’s existing clients, Hung said.

However, revenue generated from sales of logic integrated circuit (IC) products is likely to be flat this quarter from last quarter, but might gain steam next quarter on recovering demand from clients, Hung said.

Logic IC products accounts for about 30 percent of the company’s total sales.

“The higher average selling prices of the advanced DRAM business for mobile and graphics will also help the company’s gross margin continue to improve from this quarter,” Hung said.

Powertech’s gross margin for the first quarter of the year improved 3.2 percentage points to 17.7 percent from a year ago, due to the firm’s efforts in reducing costs and improved product mix, Hung said.

Gross margin increased 1.5 percentage points from the previous quarter’s 16.2 percent, he said.

That helped the company achieve a better-than-expected 29.1 percent annual increase in net income to NT$771 million last quarter, or NT$1.01 per share.

The company said its earnings growth last quarter also reflected strong performance in the DRAM segment.

“The new plant in Xian, China, that is in partnership with US-based Micron Technology Inc has made significant contribution to DRAM sales last quarter,” chairman Tsai Du-kung (蔡篤恭) said.

Overall, revenue contribution from DRAM increased to 30 percent of total revenue last quarter from 26 percent in the previous quarter, the company said.

The company aims to continue improving its gross margin this year and develop new technologies with major clients to catch the market trends in the next few years, Tsai said.

Meanwhile, the company’s board has approved the distribution of a cash dividend of NT$3 per share based on last year’s net profit of NT$4.42 billion, or NT$4.24 per share, with a payout ratio of 70.75 percent.

The planned cash dividend suggested a dividend yield of 5.28 percent, based on the company’s closing share price of NT$56.8 yesterday in Taipei trading.

Hung said that Powertech plans to maintain a high dividend payout policy.

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