Nanya Technology sees long supply constraints

By Lisa Wang  /  Staff reporter, with CNA

Wed, Jun 19, 2013 - Page 13

Nanya Technology Corp (南亞科技) yesterday said chip supply constraint could be in place for at least three years through 2015 amid strong demand for chips used in mobile devices.

There is also limited growth in chip supply after a severe industrial slump over the past few years has reduced the number of global DRAM chip suppliers from 40 to four, Nanya president Charles Kau (高啟全) said.

This year, demand would exceed supply by 3 percent, Kau said in a speech at a Taipei forum organized by the Photonics Industry and Technology Development Association (PIDA, 光電協進會).

The supply constraint is expected to worsen next year and in 2015, when demand exceeded supply by 5 percent and 7 percent respectively, Kau said, adding that the shortage is likely to extend into 2016.

As long as supply constraint continues, Nanya’s operation is expected to improve, he said.

The nation’s No. 1 DRAM chipmaker swung back into the black last quarter, ending three years of losses.

Nanya is shifting away from the PC segment and expanding into the mobile and consumer electronics segments. It currently derives 60 percent to 70 percent of its revenue from selling chips for consumer electronics and mobile devices such as tablets.

Kau said the company would totally exit the PC and server markets more than a year from now.

Nanya’s output has grown fivefold over the past year after it began collaboration with Chinese TV brands last year in designing new TVs. The Chinese market accounted for between 70 percent and 80 percent of Nanya’s total revenue, Kau said.

Nanya is one of the four Taiwanese firms that a visiting group of representatives from Chinese TV makers — led by China Video Industry Association deputy director Bai Weimin (白為民) — plan to meet with this week to discuss collaboration.

The others are panel makers Innolux Corp (群創光電), AU Optronics Corp (AUO, 友達光電) and component maker Simula Technology Inc (矽碼科技).

Separately, prices of NAND flash are expected to continue rising in the second half of this month and beyond in view of the increasing popularity of mobile communications devices, DRAMexchange, a research division of market advisory firm TrendForce (集邦科技), said in a report yesterday.

Contract prices of NAND flash, a type of memory chip used in storage products such as USB memory sticks, rose by between 2 percent and 4 percent in the first half of this month, compared with the second half of last month, according to DRAMexchange.

The report said that as the effects of peak season in the high-tech sector were expected to continue into the second half of this year and further boost demand for smartphones and tablet computers, original equipment manufacturing (OEM) service providers have started to build up their NAND flash inventories.

DRAMexchange said OEM service suppliers rushed to increase their inventories amid fears that rising demand will further push up NAND flash prices in the near future.