Adata Technology Co (威剛科技) yesterday reported a spike in net profit last quarter, as the potential easing of the US-China trade dispute helped drive a rebound in prices and demand.
That indicated that the world’s memory industry has ridden out a down-cycle and is on course for a recovery, as reflected in improving demand from the major data center operators and increased memory space in new smartphones, the world’s second-largest memory module supplier said in a statement.
Memorychip prices are expected to rise next year on the back of increasing demand from 5G, artificial intelligence, automotive electronics and other emerging applications, it said.
“The global memory industry is to regain growth in 2020, attributable to significant increases in data processing and transmission,” Adata said.
That prediction is in line with the latest forecast by TrendForce Corp (集邦科技), which said DRAM chip prices are expected to drop about 5 percent quarterly this quarter, a drastic improvement from a decline of between 15 and 20 percent last quarter.
Price reductions are set to slow to a low-single-digit percentage in the first quarter next year, TrendForce said.
In the third quarter, Adata’s net profit surged to NT$423 million (US$13.9 million) from NT$110 million in the second quarter and NT$37 million in the third quarter last year.
That translated into earnings per share (EPS) of NT$1.94 last quarter, compared with NT$0.53 the previous quarter and NT$0.40 a year earlier.
Adata last quarter posted an operating profit of NT$401 million, compared with an operating loss of NT$199 million in the second quarter. It reported operating profit of NT$87 million the previous year.
“Memory prices on the spot market continued to bounce back as customers became proactive in ordering,” the company said.
Gross margin improved to 16.22 percent, from 8.49 percent in the second quarter and 6.67 percent in the third quarter last year.
Meanwhile, Phison Electronics Corp (群聯電子), which supplies NAND flash memory controllers and modules, posted a record-high quarterly net profit of NT$1.63 billion, or EPS of NT$8.68.
Last quarter’s net profit doubled from NT$780 million, or EPS of NT$3.96, in the second quarter, it said.
On an annual basis, net profits grew 25 percent from NT$1.3 billion, or EPS of NT$7.12.
Phison’s shipments of solid-state-drive and embedded multimedia cards almost doubled from the previous year, while shipments of memory modules rose 29 percent year-on-year, it said.
It said the growth indicated that it had gained market share and benefited from customers’ inventory restocking demand ahead of the year-end shopping spree.
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