Nanya Technology Corp (
But, recovering prices for dynamic random access memory, or DRAM, chips would arrive soon to offset pressure on profitability, the company said at an investors conference.
"We believe prices are approaching the bottom, or will hit the bottom in the near term," company spokesman Pai Pei-lin (
"We believe the second quarter will be a fair period as messages from our customers indicate demand is quite good. On top of that, chip supply from new factories in the industry will be limited in the next few months," Pai said.
Nanya Technology, which supplies memory chips to computer brands such as Dell Inc, reported lower earnings for the three months ended March, at NT$991 million, compared to NT$1 billion last year.
Earnings per share edged down to NT$0.27, from NT$0.28, year-on-year, on higher revenue of NT$1.08 billion, according to the company.
Pai blamed a 24-percent decline in the company's average selling prices, quarter on quarter, behind the decline. The prices fell 20 percent from a year earlier.
But as falling contract prices have appeared to hold steady, with a decline of up to five percent in the second half of this month from the first half, Pai said it would bode well for a price rebound in May as computer vendors are expected to start inventory build-up in preparation for demand from the upcoming long vacation in China.
Even so, most analysts doubted the optimistic outlook.
"I believe the price rebound will be short-lived and insufficient to offset price erosion, as demand will remain weak in this traditionally slow season for the computer industry," said Wang Bou-li (
But, Inotera Memory Inc (
Wang said he would have expected Nanya Technology to book a loss in the second quarter, but now he believed there's still chance for the company to maintain profitability as Inotera keeps performing better than expected.
Last quarter, non-operating income from Inotera made up a bulky 70-percent share, or NT$730 million, of the Taiwanese chipmaker's total earnings.
Inotera now operates a cost-saving 12-inch plant in Taoyuan, while Nanya Technology only has two less-advanced 8-inch fabs.
Daniel Lu (盧中興), an analyst with Barits International Securities Co (倍利證券), also said weakening chip prices, which are falling and nearing cost, will make a tough job for Nanya Technology to eke out a profit in the current quarter.
"Inotera will play a crucial role in keeping Nanya Technology above water," Lu said.
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