Adata Technology Co (威剛科技), the nation’s biggest memory module maker, yesterday posted the highest quarterly net profit in four years as prices surged on a supply crunch.
Adata expects supply constraints for DRAM and Nand flash memory chips to carry into the second half of this year, as smartphone vendors are to enter a new product launch season, spurring demand for memory chips.
Supply will remain under strain as the world’s leading memory chipmakers have had their capacity expansions under control and are struggling to fix lingering yield rate problems to push the technology to the next generation, Adata said in a statement released yesterday.
However, new supply from Chinese chipmakers is a remote possibility as patent licensing talks to produce the memory chips have stalled, despite the Chinese companies’ active expansion budgets, Adata said.
“The company does not expect any major impact from China on the world’s DRAM and Nand flash memory chip industry in 2017 and 2018,” Adata said.
Memory chip prices “are to climb up steadily in the second quarter, unfazed by the seasonal weakness while the supply shortage in memory chips will extend into the third quarter,” the company said.
The company’s financial performance this year will be good, aligning with the global memory chip industry’s prospects, the statement said.
Adata’s optimism is backed by the solid support from its memorychip partners and lower inventory costs, it said.
DRAM chip and Nand flash memory chip modules were the two biggest revenue contributors for the company last quarter, during which Adata made NT$8.03 billion (US$265 million), up 65 percent annually.
Consolidated net profit last quarter surged about 550 percent to NT$787 million, compared with NT$120 million during the same period last year, the statement showed.
Earnings per share soared to NT$3.62 per share, compared with NT$0.56 a year earlier.
Gross profit more than tripled to NT$1.46 billion last quarter, from NT$349 million a year earlier.
Gross margin improved significantly from 7.15 percent a year ago to 18.19 percent.
Adata attributed the net profit growth partly to a minor foreign-exchange loss, while the strong NT dollar ate into other firms’ profitability last quarter.
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