Thu, Jul 11, 2019 page12

• Nanya Technology Q2 profit plunges

  IN-DIGESTION: Major DRAM chipmakers inventories, as well as the US-China and Japan-South Korea frictions will be key factors influencing chip prices in the coming months

  • By Lisa Wang / Staff reporter
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  DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said net profit last quarter plunged 75.7 percent annually as flagging demand and excess inventories drove down chip prices.

  Net profit dipped to NT$2.75 billion (US$88.25 million) during the quarter that ended on June 30, compared with NT$11.31 billion in the same period last year, while on a quarterly basis, net profit shrank 23.3 percent from NT$3.59 billion.

  Chip prices fell at a quarterly rate of 15 percent, while shipments jumped 30 percent, Nanya said.

  It said it expects prices to continue to fall this quarter, albeit at a slower pace, as a seasonal rebound in end-market demand for computers, mobile phones, consumer electronics and servers would help underpin DRAM shipments.

  “Demand for our chips is likely to rise in the third quarter,” Nanya president Lee Pei-ing (李培瑛) told a media briefing in Taipei. “DRAM supply is stabilizing, which will lead to milder price declines.”

  Shipments are expected to grow about 15 percent this quarter from last quarter, according to presentation materials from an investors’ conference posted on its Web site.

  Gross margin this quarter might be little changed from 34.9 percent last quarter, Lee said.

  The US-China trade friction, the Japan-South Korea trade dispute as well as major DRAM chipmakers’ inventory digestion remain key factors to determine prices, he said.

  “Prices might increase for certain types [of DRAM]. On the spot market, prices might pick up,” Lee said.

  Nanya would come to a conclusion about its migration to next-generation, or 10-nanometer, technology by the end of this year, Lee said.

  It might develop its own 10-nanometer technology, or continue transferring it from Micron Technology Inc.

  Nanya’s quarterly guidance has factored in potential effects from Japan’s export curbs on key semiconductor materials — including photoresist, hydrogen fluoride and etching gas — to South Korea, Lee said.

  Some of Nanya’s customers have expressed concern that the Japan-South Korea dispute could limit DRAM production and supply from South Korean firms, he said.

  However, no dramatic reaction has happened yet, he added.

  “Those materials are crucial and indispensable in semiconductor manufacturing,” Lee said. “It will not be easy to find replacements in the short term.”

  Supply constraints of photoresist could have a bigger impact on chip manufacturing, given a short shelf life of six to 12 weeks, he said.

  Any changes in the supply of photoresist involves a new round of product qualification, due to complexity in the semiconductor manufacturing process, Lee added.

  Nanya shares yesterday rallied 2.55 percent to NT$64.4 in Taipei trading after local Chinese-language media reported that the company would benefit from the trade dispute between Japan and South Korea, as Samsung Electronics Co and SK Hynix Inc might cut their chip productions.
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