Nanya Technology Corp (南亞科技), Taiwan's top maker of DRAM memory chips, announced its first quarterly profit in over a year during an investors' conference yesterday, crediting strong sales of specialized memory chips for notebook computers for its renewed good fortune.
The company said preliminary figures show revenue in the first quarter more than doubled from the same time last year, rising to NT$7.77 billion (US$222 million), with a 210 percent year-on-year rise in profit, to NT$1.5 billion, (US$42.9 million).
This time last year, Nanya Technology -- and the rest of the global memory chip industry -- was announcing growing quarterly losses. Nanya posted a net loss of NT$1.66 billion (US$47.6 million), as sales totaled only NT$3.1 billion (US$88.6 million).
The DRAM industry as a whole lost two-thirds of its value last year, dropping from US$31 billion in 2000 to US$10.5 billion last year, according to the market research firm Dataquest.
When the market began to tick up last November, Nanya was one of the first firms to profit. It timed the market right for a new product called double data rate (DDR) memory chips. It said that in December and January it filled 70 percent of the world's demand for 256-megabit DDR memory chips, and built a name for itself in the process.
Its production of DDR memory is now 36 percent of overall production, down from 92 percent in January, because of a surge in demand for a different kind of memory chip used in notebook computers. The ability to change from one product to another is one of Nanya's strengths.
"We think that after May, DDR demand will take off again," said Charles Kau (
Last year Nanya signed on new OEM customers to long-term contracts. Computer makers such as Toshiba Corp, NEC Corp, Dell Computer Corp and Compaq Computer Corp all inked new agreements with the company.
Contract prices for memory chips are generally higher than spot market prices. For example, the company is currently selling chips at US$7 a piece on the spot market and US$9 per chip to contract customers.
The amount of production going to contract customers has grown from none last year to 39 percent in March, according to Kau. He also believes that the percentage of contract customers will rise to 60 percent in April and top 65 percent by the end of the second quarter.
With regards to possible cooperation with Infineon Technologies AG, the German chip giant, Kau only said, "I am unable to make any comment on the subject before any kind of cooperative agreement is finalized."
A local Chinese-language economic daily reported last month that Infineon and Nanya would work together on at least one, and possibly two, 12-inch wafer fabrication plants. Although both companies have refused to comment on the report, they admitted that talks on some kind of agreement were taking place.
Shares of Nanya Technology ended yesterday slightly up at NT$40.3 per share, with analysts saying the company's sales figures met expectations.
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