Macronix International Co (旺宏電子) yesterday said that net profit last quarter soared 86 percent quarter-on-quarter, driven by strong demand from its top client, Nintendo Co, and stabilizing chip prices.
Chip prices have been in a downward spiral since the third quarter of last year amid sluggish demand, partly due to a trade spat between the US and China, the memorychip maker said.
Net profit jumped to NT$264 million (US$8.49 million) in the quarter that ended on June 30, compared with NT$142 million in the first quarter, it said, adding that gross margin improved from 25 percent to 27 percent in the period.
Revenue from its read-only memory (ROM) chips showed the fastest growth of 75 percent, thanks to rising demand from Nintendo following the launch of new Nintendo Switch game consoles.
ROM chips accounted for 29 percent of Macronix’s total revenue of NT$7.5 billion last quarter, while revenue from NAND flash memory chips contributed 63 percent, it said.
Net profit tumbled 86 percent from NT$2.07 billion a year earlier due to price declines, it said.
Macronix holds a bullish outlook for the current quarter, saying that a seasonal uptick would boost all of its business segments, including NAND flash memory, ROM chips and foundry services.
“The third quarter is usually a peak season for Macronix. We are pretty optimistic about our business in the second half,” Macronix president Lu Chih-yuan (盧志遠) said. “We have seen strong demand for all of our products, which has led to stabilized prices and increases in shipments.”
Commenting on investors’ concern over its inventory totaling a massive NT$18.87 billion last quarter, Lu said that a large portion was built in preparation for customer demand in the peak season.
Most of the prepared goods would be shipped in the second half, he said.
Macronix aims to keep inventory at a healthy level of NT$10 billion, he added.
Gross margin is likely to improve further this quarter, given falling inventory and stable chip prices, Lu said.
Macronix said that it plans to spend NT$14 billion on capital expenditure this year, mostly on technology upgrades, rather than capacity expansion.
The chipmaker said that it plans to migrate almost all of its NAND flash memory chips from 36-nanometer to 19-nanometer technology, while NOR flash memory chips would be made on a more advanced 55-nanometer process, instead of 75-nanometer technology used currently.
Macronix plans to complete the development of its first 192-layer 3D NAND memory chips next year, Lu said.
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