Macronix International Co (旺宏), the world’s biggest NOR flash memorychip supplier, yesterday said that first-quarter net profit leapt more than eightfold to NT$1.88 billion (US$63.29 million) from NT$203 million, buoyed by higher prices compared with a year ago.
However, on a quarterly basis, net profit contracted 27 percent from NT$2.58 billion due to seasonal weakness, the Hsinchu-based company said.
Earnings per share stood at NT$1.06 last quarter, compared with NT$0.12 a year ago and NT$1.45 the previous quarter.
SEASONALITY
“The company’s revenue usually drops dramatically during the first and second quarters because of the slow season effect, but that did not happen in the first quarter this year,” chairman and chief executive officer Miin Wu (吳敏求) told a teleconference.
Revenue only shrank 14 percent sequentially to NT$9.06 billion last quarter.
Gross margin inched down to 42 percent from 43 percent, mostly due to a strong New Taiwan dollar, Wu said.
Prices for its two major products — NOR flash memory chips and read-only memory (ROM) chips — trended up slightly last quarter, he said.
Looking forward, Wu said: “The second quarter is usually the slowest period. I do not expect this second quarter will be any different. Revenue for the quarter will hit the trough this year.”
While Macronix is making an effort to keep chip prices stable this quarter, the company would be happy if revenue contracts by no more than 5 percent, Wu said.
In the second half of the year, the supply of high-density NOR and NAND flash memory chips is likely to be tight due to seasonal demand, which would drive up chip prices, he said.
To cope with the seasonal uptrend, the company would continue to build up its inventory, Wu said.
The company has already amassed NT$11.23 billion worth of inventory last quarter, the company’s financial statement showed.
NINTENDO
About 80 percent of the inventory is reserved for Nintendo Co of Japan, the company said, adding that its factories are running at full capacity.
Commenting on the potential impact from the trade dispute between the US and China, Wu said he has not seen any significant effects.
Macronix has very little exposure to China’s ZTE Corp (中興), Wu said in response to an investor’s question.
The company plans to spend NT$5.8 billion to increase the production flexibility of its 12-inch factory, allowing it to switch between 19-nanometer NAND flash and 55-nanometer NOR flash chips.
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