DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted its weakest quarterly net profit in 10 quarters for the last quarter of last year, as prices tumbled 15.5 percent sequentially due to soft demand.
Net income plunged 60.6 percent to NT$1.86 billion (US$55.18 million) during the quarter ending Dec. 31 last year, compared with NT$4.73 billion in the third quarter of last year, according to the company’s financial statement. On an annual basis, net profit plunged 78.3 percent from NT$8.57 billion.
Last quarters figure includes a NT$190 million gain from Inotera Memories Inc (華亞科技), a DRAM chipmaker that is 24 percent owned by Nanya Technology.
Nanya Technology has agreed to divest its holding of Inotera to Micron Technology Inc in exchange of a stake in the US memory chipmaker.
Inotera made NT$4.47 billion last quarter, according to a company filing with the Taiwan Stock Exchange. That was down about 23 percent sequentially from NT$5.77 billion.
Nanya Technology said that it has seen signs for stability for the current quarter.
“We are not pessimistic about the first quarter. We are confident about [ordering in] the first quarter,” president Lee Pei-ing (李培瑛) told a media briefing. “We are seeing seasonal demand and reviving end demand from China mostly for consumer electronics such as digital TVs.”
Recovering demand is expected to help shrink price decline to a single-digit percent in the current quarter from last quarter, Lee said.
Last year, prices fell by an average of 10 percent each quarter, he said.
Revenue is expected to drop slightly this quarter from last quarter’s NT$10.35 billion on expectation that shipments will be flattish this quarter, Lee said.
Gross margin is expected to rebound a bit this quarter from 30 percent in the previous quarter, without the one-time costs for issuing new shares in the final quarter of last year, he said.
However, Nanya Technology holds a cautious view for all of this year, given uncertainty over the macroeconomic situation and a potential production increase from South Korean rivals.
One bright spot is the company’s new mobile DRAM chips. The firm aims to boost revenue share from mobile DRAM to up to 15 percent from less than 10 percent currently, Lee said.
Nanya Technology has budgeted NT$25.25 billion in capital spending this year, a spike from NT$3.8 billion last year. The investment is expected to help the chipmaker boost capacity by 10 percent annually this year.
Separately, United Microelectronics Corp (UMC, 聯電), the nation’s No. 2 contract chipmaker, yesterday posted a stronger-than-expected quarterly net profit of NT$3.16 billion for the final quarter of last year.
The figure is much better than a NT$1.69 billion estimate by Diawa Capital Markets analyst Rick Hsu (徐稦成).
Gross margin improved to 20.6 percent last quarter from 19.6 percent in the previous quarter, also beating Hsu’s estimate of 18.6 percent. UMC attributed the improvement to a better production yield rate and a weak New Taiwan dollar against the US dollar.
Company chief executive officer Po-Wen Yen (顏博文) said the company is “seeing signs of cyclical bottoming as most of our customers’ inventories have returned to reasonable levels. For the first quarter of 2016, we expect our foundry revenue to remain flat.”
Revenue is expected to be flat this quarter, UMC predicted.
UMC also expects its foundry sector to grow 4 percent annually in revenue this year and the company will outgrow the sector, Yen said.
The growth driver will be its 28-nanometer technology, which is expected to make 10 percent of UMC’s revenue this quarter, flattish from last quarter.
The chipmaker expected a utilization rate for its 28-nanometer technology to rise to 62 percent this quarter and to 85 percent next quarter and 90 percent in the second half of this year, compared with 50 percent last quarter.
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