Tue, Jul 18, 2017 - Page 12 News List

ECB losses, taxes cut into Nanya’s profit

By Lauly Li  /  Staff reporter

Nanya Technology Corp (南亞科技) yesterday reported a net income of NT$6.44 billion (US$211.71 million) for last quarter, slightly lower than consensus estimates, as valuation losses from its exchangeable corporate bonds (ECB) and tax expense offset gains from its Micron Technology Corp share disposal.

Nanya Technology, the nation’s largest DRAM chip supplier, was expected to post more than NT$6.44 billion in net profit, after selling shares of Micron Technology in four trading days last month and recognizing as much as NT$4.81 billion in disposal gains for the April-to-June quarter.

However, NT$1.01 billion in ECB valuation losses, NT$1.5 billion in taxes on undistributed earnings and NT$86 million in foreign-exchange losses weighed on the company’s non-operating performance last quarter, it said.

Excluding the non-operating factors, Nanya Technology’s core business climbed last quarter from a quarter ago, as it benefited from a better supply balance in the DRAM market, prompting an increase in average selling prices.

“The average selling price rose 4.6 percent last quarter from a quarter ago. The total bits shipments also increased 1.7 percent quarterly,” company president Lee Pei-ing (李培瑛) told a media briefing.

Gross margin was 43.9 percent last quarter, gaining by 3.8 percentage points quarter-on-quarter, while operating margin was 33 percent, up 1.5 percentage points during the same period, company data showed.

In the first half of the year, Nanya Technology’s cumulative net profit reached NT$9.72 billion, or NT$3.54 per share, which more than tripled from NT$2.24 billion, or NT$0.82 per share, over the same period last year, the data showed.

Lee said the company expects DRAM’s average selling price to grow by between 4 percent and 6 percent sequentially this quarter, mainly driven by the robust demand for chips used in servers and smartphones amid continued supply constraints.

Those are positive factors that should lift Nanya Technology’s margin performance this quarter, he added.

After completing its customer verification in May, the company expects its 20-nanometer chip production to ramp up to 30,000 wafers starts per month (WSPM) next quarter, which is one quarter ahead of its schedule.

The company expects the cost of producing a 20-nanometer chip to drop to that for a 30-nanometer chip next quarter.

Nanya Technology has set a target of 38,000 WSPM for 20-nanometer chips in the first half of next year, he added.

The company still has a 4.11 percent stake in Micron and does not rule out selling more shares of the US company if the stock price is “reasonable,” he said.

“But we will not sell all of our stake in Micron,” he said.

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