Adata revenue spikes 30% on demand

DRAM STABILITY::Adata is confident the market will remain strong this quarter, while TrendForce expects mainstream contract prices to fall in the fourth quarter

By Lisa Wang  /  Staff reporter

Wed, Sep 05, 2018 - Page 12

Memory module supplier Adata Technology Co’s (威剛科技) revenue last month soared nearly 30 percent to a five-year high, thanks to robust demand for DRAM modules, the company said yesterday.

It said it remains optimistic about the DRAM market in the current quarter in light of stable supply and demand.

“With resilient customer demand and stable supply, DRAM products will continue to outperform other products in terms of revenue and help drive growth in the second half,” Adata said in a statement.

Demand for NAND flash memory products — another major revenue source for Adata — is rebounding as falling prices stimulate demand for solid-state drive storage, but price competition is to remain fierce in the short term, the company said.

NAND flash chip prices are to shrink 10 percent this quarter as a supply glut continues due to lukewarm growth in smartphone and laptop shipments, market researcher TrendForce Corp (集邦科技) said.

It was followed by a drastic quarter-on-quarter price reduction of 20 to 30 percent last quarter.

Adata said revenue expanded to NT$3.38 billion (US$109.86 million) last month, compared with NT$2.61 billion in July, marking the highest level since May 2013. On a monthly basis, revenue jumped 24 percent from NT$2.73 billion in July.

The company “benefited from stable DRAM prices and strong DRAM module shipments,” Adata said.

Revenue from DRAM products skyrocketed 74.56 percent year-on-year to NT$2.41 billion, representing monthly growth of 35.5 percent, the company said.

In the period from January to last month, Adata accumulated NT$22 billion in revenue, up 4.42 percent from the same period last year. DRAM products have made up about 64 percent of this year’s revenue so far.

Adata stock rose 0.2 percent to NT$51 yesterday, under-performing the Taipei Exchange’s 1.07 percent gain.

Despite Adata’s optimism, TrendForce expects DRAM prices to start trending down next quarter on a contract basis, snapping a three-year uptrend.

Prices of mainstream DRAM chips on the spot market have been falling since last month, widening the gap with contract prices and setting the stage for contract prices to also drop, the Taipei-based researcher said in a report on Monday.

“Taking the server DRAM market as an example, where demand has been fairly strong, latest-round price negotiation has stalled. This is an indication that DRAM suppliers might have to lower prices to maintain or increase sales volumes for their fourth-quarter deals,” TrendForce senior research director Avril Wu (吳雅婷) said in the report.

PC DRAM chip prices have risen an average of 2 percent this quarter from last quarter, TrendForce said, adding that the mainstream 4-gigabyte module costs US$34.5 per unit, while the 8-gigabyte module is US$68 per unit.