Nanya Technology Corp (南亞科技), the nation’s biggest DRAM supplier, yesterday said valuation losses from its exchangeable corporate bonds (ECB) continued to eat into its bottom line last quarter, offsetting gains made by disposing of Micron Technology Inc shares.
The company booked NT$6.86 billion (US$227 million) in valuation losses for its ECB last quarter, as Nanya stock extended its run up to NT$86.3 on Sept. 30, backed by solid business prospects.
The price is much higher than the convertible price of NT$52.47 per share set in January this year.
“The valuation loss will be much lower in the fourth quarter [of this year], as about 60 percent of the bonds have been converted into shares. Besides, the [share] price has climbed to a relatively high level,” Nanya Technology president Lee Pei-ing (李培瑛) told a media briefing.
The valuation loss significantly curtailed the chipmaker’s non-operating gains primarily from disposing Micron shares amounting to NT$11.17 billion last quarter.
Nanya still holds a 1.93 percent stake in Micron following a series of sales since June.
“We plan to unload as many Micron shares as we can in the fourth quarter,” Lee said.
He does not rule out selling all Micron shares owned by the chipmaker.
Net profit surged to NT$8.57 billion during the quarter ending Sept. 30, compared with NT$1.4 billion a year ago, its strongest in three quarters.
That represented quarterly growth of 32.1 percent from NT$6.49 billion in the second quarter, thanks to an average sales price hike of 2.3 percent quarter-over-quarter, and an increase of 2.9 percent in shipments.
Lee expects the growth momentum to carry into this quarter, given limited supply growth and robust seasonal demand for mobile phones, commercial laptops and consumer electronics such as set-top boxes, game consoles and voice assistants for “smart” home devices.
“We continue to see supply scarcity in the fourth quarter, setting the scene for further price increases,” Lee said.
Mobile DRAM will be the biggest beneficiary, as most handset vendors are launching their flagship models this quarter, leading the price to climb 10 percent quarter-over-quarter this quarter, Lee said.
Other types of DRAM are to enjoy a single-digit percentage price hike, he said.
As DRAM demand continues to exceed supply, Lee expects DRAM prices to hold steady even next quarter, which is usually a slack season for the electronics industry.
Nanya is to re-enter the server market by offering a new 8-gigabit DDR4 DRAM this quarter, in pursuit of its next growth engine, Lee said.
The 8-gigabit DDR4 DRAM will be made on the company’s 20-nanometer (nm) technology, the chipmaker said.
Nanya plans to expand output of 20nm chips to 38,000 wafers a month by the end of this year, from 10,000 wafers last quarter, one month ahead of schedule.
The server market has been thriving thanks to growing demand for cloud-enabled data centers rather than for private or public use, he said.
Increasing use of artificial intelligence will inject new growth in the future, he said.
“The growth for DRAM used in servers may catch up to the pace of mobile phones, or even outpace that. The mobile phone sector is approaching saturation,” Lee said.
Mobile phones consumes about 33 percent of global DRAM output, while servers use 20 percent, he said.
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