Macronix International Co Ltd (旺宏電子) expects consumer demand to start picking up in the second half of this year amid increasing signs of easing tensions between the US and China, a company executive said yesterday.
As the world’s two biggest economies resumed trade talks this week in an attempt to resolve their trade disputes, the memorychip maker believes that a deal is starting to take shape, which would eventually lead to the cancelation of punishing tariffs and the removal of trade barriers, Macronix founding chairman Miin Wu (吳敏求) said.
As long as the trade war settles, “almost all businesses will return to normal as the uncertainty vanishes,” although the strength of the recovery remains to be seen, Wu said.
Consumer electronics would be the early beneficiary from the recovery of consumer confidence, while smartphone demand should bounce back in the second half of this year, he said.
The company’s outlook for the first two quarters of the year remains bleak, as most clients are conservative about placing orders for fear of building excessive inventories, he added.
“Business [prospects] will remain weak before June,” Wu said.
As of Dec. 31 last year, Macronix’s inventories swelled to NT$17.95 billion (US$582.32 million), compared with NT$9.87 billion at the end of 2017.
A bulk of the inventories have been prepared for its top client during the peak season in the second half of this year based on the customer’s sales forecast, Wu said.
The client has a good track record in absorbing inventories, he said.
The US-China trade war has dealt a blow to prices for NOR and NAND flash memory chips, Wu said.
Prices for low-end memory chips made primarily by Chinese firms have plunged by a double-digit percentage since the beginning of the year, he said.
Macronix has shifted focus away from such products due to their price volatility, he added.
Despite the difficult period, Macronix would be on track to expand its capacity to produce 19-nanometer chips, Wu said.
The company would also continue investing in research and development, he said.
The Hsinchu-based chipmaker last month saw revenue tumble approximately 20 percent to NT$1.81 billion, from NT$2.26 billion in January. That represented an annual decline of 33.6 percent.
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