Nanya posts loss, forecasts unprofitable year

Nanya Technology Corp (南亞科技), Taiwan's third-biggest computer memory chipmaker, reported a second-quarter loss and said it expects the full year to be unprofitable, as chip prices hover below production costs.

The company also said it will seek to raise NT$8 billion (US$231 million) from the sale of global depositary receipts priced at NT$20 each, or a 43 percent premium to the close of the company's share price today.

Nanya's results were in keeping with losses and profit slumps riddling Taiwan's technology industries, which form the backbone of the nation's economy. Taiwan is suffering from a global slowdown, as consumers in the US, Japan and Europe buy fewer computers, mobile phones and other electronic gadgetry.

"I don't think any memory-chip company can make a profit," said Simon Chao, who helps manage NT$700 million in securities at President Investment Trust Corp (統一投信). "Nanya will have to face a lot of depreciation costs." Nanya said it lost NT$3.8 billion (US$110 million) in the first half. That indicates a second-quarter loss of US$2.1 billion, based on a reported loss of NT$1.7 billion in the first three months of the year.

Nanya said it expects a NT$2.2 billion loss for the third quarter and a NT$96 million profit for the fourth. That will add up to a full-year loss of NT$5.8 billion, the company said, scrubbing its earlier forecast of a NT$2.3 billion profit.

The sale of 400 global depositary receipts, which is bigger than the company earlier signaled, is expected to help Nanya finance a chip factory it built last year. Chao said the technology employed by the plant is "not very advanced."

Sales in the second quarter fell 12 percent to NT$2.9 billion after memory chip prices slumped more than 90 percent in the past year. Nanya lowered its full-year sales forecast to NT$15.9 billion.

Shares in Nanya, part of the Formosa Group, Taiwan's biggest chemicals company, fell NT$0.45, or 3.1 percent, to NT$14. The shares have fallen 77 percent since they were sold publicly last August, compared with a 45 percent fall in the main TWSE Index.