DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted its weakest net quarterly profit in three-and-a-half years as prices dipped on excess inventory and sluggish demand.
Net profit for last quarter fell almost 84 percent to NT$1.28 billion (US$42.64 million) from NT$7.95 billion a year earlier, or earnings per share of NT$0.42 from NT$2.57.
While shipments last quarter grew more than 45 percent from a year earlier, prices plummeted more than 45 percent, Nanya said.
On a quarterly basis, net profit tumbled 42 percent from NT$2.21 billion.
Nanya said it sees clearer signs of a recovery this quarter as demand is picking up after major global DRAM suppliers reduced their inventories to healthier levels, putting an end to a slump lasting five to six quarters.
“We have seen significant improvement in demand, while supply growth will be limited as major chipmakers budgeted for conservative capital spending last year,” Nanya president Lee Pei-ing (李培瑛) told reporters.
DRAM prices and shipments are likely to rebound mildly this quarter compared with last quarter, which would help boost gross margin from last quarter’s 25.7 percent, Lee said.
Gross margin last quarter fell from 52.9 percent a year ago and 28 percent the previous quarter.
Nanya has a positive outlook for supply-and-demand dynamics this year, as overall DRAM supply is to grow by between 10 and 15 percent year-on-year, which is slower than estimated growth in demand of between 15 and 20 percent, he said.
The increasing demand stems from 5G-enabled and flagship smartphones with more memory, gaming and commercial laptops, cloud-based servers and consumer electronics, such as TVs and routers, he said.
Nanya plans to increase its shipments by 15 percent this year to cope with higher demand and the recovery would fuel revenue growth in each quarter, he added.
Nanya announced that it had finalized its technology road map for 10-nanometer-class technology.
The company said that it is developing its own advanced technology, rather than licensing from long-term partner Micron Technology Inc, to reduce costs.
“We would not have to pay licensing fees and royalties anymore,” Lee said.
The chipmaker is scheduled to start pilot production of its first 10-nanometer-class chips in the second half of this year.
It plans to target 8-gigabyte low-power DDR4 and high-density DDR5 chips used in consumer electronics, smartphones, laptops and PCs.
Nanya expects its capital spending to increase this year, compared with the NT$5.5 billion it spent last year.
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