DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said it plans to halve capital spending for this year as the industry faces an overcapacity-driven downturn.
Demand took a nosedive last quarter amid growing downside risks from the global economy and the US-China trade dispute, the chipmaker said.
The negative sentiment stalled demand for mobile phones, PCs and servers, it said.
As a result, Nanya Technology saw net profits plunge 38.2 percent in the fourth quarter to NT$7.95 billion (US$257.95 million), compared with NT$12.87 billion in the third quarter of last year.
Gross margin last quarter shrank to 52.9 percent from 58.9 percent in the prior quarter, the company said in a financial statement.
Last year as a whole, Nanya Technology saw net profits slide 2.3 percent to NT$39.36 billion from NT$40.3 billion in 2017.
However, operating profits soared to an all-time high of NT$39.36 billion, from NT$18.79 billion in the previous year, benefiting from booming demand in the first nine months of last year.
The chipmaker expects last quarter’s weakness to carry into at least the first half of this year.
“We are conservative about market outlook for the first and second quarters,” Nanya Technology president Lee Pei-ing (李培瑛) told a media briefing.
DRAM chip prices are likely to fall about 10 percent this quarter from last quarter after unexpectedly tumbling by a low-teen percentage in the final quarter of last year from the previous quarter, the memorychip maker said.
Lee was more optimistic than local market researcher TrendForce Corp (集邦科技), which has predicted a price drop of 20 percent this quarter from last quarter on a contract basis.
Nanya Technology has yet to see any signs that this quarter would form a bottom, Lee said.
“The price trend for the second quarter remains vague,” he said.
The chipmaker is banking on a seasonal pickup in the third quarter for a recovery.
There is a chance that the price decline might slow down in the third quarter, as seasonal demand and improving supply of Intel Corp’s microprocessors help stimulate consumption of DRAM output, Lee said.
To cope with weak demand, Nanya Technology plans to decrease capital expenditure to slow down production.
It might spend about NT$10.6 billion on new manufacturing equipment, only half of last year’s NT$20.4 billion.
The firm cut capital expenditure for last year by 15 percent from an original estimate of NT$24 billion as the DRAM industry last quarter entered a downcycle following a boom that lasted nine quarters.
With smaller capital spending, Nanya Technology expects output to grow 10 to 15 percent annually this year, decelerating from 35 percent last year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last