Macronix International Co (旺宏電子), which supplies read-only memory (ROM) chips to Japan’s Nintendo Co, yesterday said that its net profit more than tripled sequentially to NT$616 million (US$20.29 million) last quarter, as a persistent supply crunch boosted prices and factory utilization.
Last quarter was the fourth straight profitable quarter for the chipmaker. It made NT$203 million in the first quarter of this year, while it lost NT$689 million in the second quarter of last year on heavy depreciation costs.
Gross margin climbed to 34 percent last quarter from 27 percent in the first quarter, hitting the highest level in about five years, the Hsinchu-based memorychip manufacturer said.
Macronix expects its growth momentum to further pick up speed in the second half as the consumer electronics industry enters its peak season, which will only aggravate supply constraints.
“Client orders far exceed what we can supply,” Macronix president Lu Chih-yuan (盧志遠) told investors, adding that the company has to allocate capacity among its NOR and NAND flash memorychip customers because its factories are already running at full capacity.
“We have built a large stockpile for our major client in the second quarter ahead of the peak season in the third quarter,” Lu said.
Macronix stocked NT$9.08 billion worth of memory chips last quarter, mostly ROM chips for Nintendo, as the game console supplier is scheduled to launch new game titles next quarter to fuel sales of its already popular game console — the Nintendo Switch.
Robust customer demand should help drive chip prices at a faster pace in the second half than in the first half, Lu said.
Macronix is optimistic that the demand could extend into next year, which should benefit the company given its technological edge and position in the NOR memorychip market and a likely prolonged supply constraint, especially with Toshiba Corp and Micron Technology Inc exiting the NOR flash market.
“We are positive about ROM, NOR and NAND [demand] next year,” Lu said. “We do not see any indicators of overshooting this outlook.”
Macronix expects its market share to expand from 26 percent to 30 percent of the global NOR flash memory market.
NOR flash accounted for 63 percent of the company’s overall revenue of NT$6.56 billion last quarter.
To satisfy customer demand, Macronix plans to spend NT$1.79 billion on new equipment for advanced chips this year. That would bring its total capital spending this year to about NT$4 billion, the company said.
The additional investment will be used to upgrade production of 4,800 high-end wafers a month, the chipmaker said.
Total capacity would remain unchanged, he said.
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