DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted record-high net profit for last quarter, attributable to prolonged price hikes and a massive gain on disposal of Micron Technology Inc shares.
In the quarter that ended on Dec. 31 last year, net profit skyrocketed 157 percent to NT$21.98 billion (US$743.7 million), compared with NT$8.55 billion in the third quarter of 2017.
The company last quarter booked a NT$16.12 billion nonoperating gain from selling its shares of Micron.
The record-high quarterly figure helped lift the memory chipmaker’s bottom line last year to the highest in its history. For last year as a whole, net profit jumped about 70 percent to NT$40.29 billion, compared with NT$23.72 billion in 2016.
The growth momentum is expected to carry into the first half of this year, as supply scarcity continues due to rational capacity expansion among the world’s major chip suppliers, Nanya Technology said.
“We expect growth in supply and demand to be stable in the first half... Besides, no signs on the horizon indicate a pessimistic [outlook] for the third quarter, which is usually a high season,” company president Lee Pei-ing (李培瑛) told a media briefing.
Lee said he expects DRAM chip prices to rise mildly this quarter, extending a quarters-long upward trend.
That might help further boost the company’s gross margin from last quarter’s 49.8 percent, he added.
There will likely be uncertainty in the second half, depending on how much new capacity Samsung Electronics Co Ltd and SK Hynix Inc add during the period, Lee said.
Based on their newly announced expansion plans, the market should remain stable this year and even next year, supported by annual growth in demand of between 20 percent and 25 percent, Lee said.
Servers will be the biggest driver for DRAM consumption this year, thanks to emerging artificial intelligence applications and more cloud-enabled services, coupled with server replacement demand by telecoms, he said.
To address rapidly growing demand for DRAM used in servers, Nanya is stepping up its efforts to strengthen its market presence and enrich its product portfolios, he added.
“Our aim is to have more balanced product lineups to better cope with market volatility... We hope to start supplying our new 8 gigabyte DDR4 for servers to select clients in the second quarter of this year,” Lee said. “We will not give up the standard DRAM [business] entirely, as it serves as a buffer against market changes.”
Nanya Technology generated revenue primarily from DRAM chips used in consumer electronics, including TVs, set-top boxes and game consoles, which accounted for 60 percent to 70 percent of overall revenue.
Low-power DRAM primarily used in mobile phones was next, contributing about 20 percent, and PC DRAM constituted the remaining 10 percent.
The chipmaker plans to spend NT$11.5 billion on new equipment this year, mostly on 20-nanometer and 10-nanometer technologies, down from NT$29.4 billion last year.
Nanya Technology forecast shipments would this year jump 45 percent year-over-year after it completes 20-nanometer technology upgrades.
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