Fri, Jan 29, 2016 - Page 13 News List

Macronix incurs loss last quarter

By Lisa Wang  /  Staff reporter

Macronix International Co (旺宏電子), which supplies memory chips for Japanese video game console maker Nintendo Co, yesterday posted a loss of NT$1.66 billion (US$49.2 million) last quarter as gross margin fell to its lowest in six quarters due to low utilization and sagging demand.

Last quarter’s figures brought Macronix’s total losses last year to NT$4.19 billion, an improvement compared with losses of NT$6.45 billion in 2014. The chipmaker lost NT$949 million in the third quarter last year.

In the final quarter last year, gross margin fell to 8 percent, compared with 14 percent the previous quarter after utilization fell from 90 percent to 70 percent.

“By lowering production, we aim to bring down our inventory to a level of NT$5 billion from NT$9 billion,” company president Lu Chih-yuan (盧志遠) said.

After a long term of incurring losses, the company is likely to get out of the woods this year thanks to revenue growth and reducing manufacturing equipment depreciation costs by 67 percent to about NT$2 billion from last year’s NT$6 billion, Lu said.

“We aim to return to profit in the second half of this year,” Lu said. “We are gaining market share this year on the back of improved costs and better technological capabilities, despite not seeing any encouraging signs [of a recovery] in the macroeconomic situation.”

Macronix would eke out a monthly profit when its monthly revenue reaches NT$2 billion, Lu said.

The company expects to become the world’s top NOR Flash memory chip supplier this year, replacing Cypress Semiconductor Corp.

NOR flash memory chips are Macronix’s biggest revenue source, accounting for 62 percent of last year’s revenue of NT$20.93 billion, company data showed.

The automotive and industrial sectors would show the strongest growth for NOR flash chips this year, Lu said.

Macronix counts the world’s top 10 car brands as its customers.

The automotive and industrial sectors made up 19 percent of Macronix’s revenue last quarter and would soon rise to more than 20 percent, Lu said.

Lu said the company’s major client is developing a new platform for its video game device this year, which could provide a boost to the company’s business.

Last year, sluggish sales of video game devices resulted in an annual decline of 45 percent in revenue for the company’s ROM chip, according to company financial statement.

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