Standard & Poor's Rating Services (S&P) announced yesterday that it had downgraded its outlook rating of Macronix International Co (
"Although Macronix has carefully managed its capital expenditure and working capital to limit its debt level and retain liquidity, the ratings on the company are likely to come under pressure if it fails to improve its operating performance and cash flow over the medium term," S&P's credit analyst Raymond Hsu said in a statement released yesterday.
"Macronix's operating performance has deteriorated as a result of severe pressure on flash memory product prices and dated process technology, which have led to a high cost structure," Hsu said, "and these challenges are expected to continue over the next few quarters."
The rating on Macronix continues to reflect its marginal position in the flash memory industry, the capital-intensive nature of the volatile semiconductor industry, and declining demand for mask ROM [read-only memory] products, the statement said.
As market conditions remain poor in the near term, S&P said it believed that cash flow generation would remain challenging for the chipmaker.
Macronix reported earlier this week a net loss of NT$6.6 billion, or NT$1.32 per share, in the first half of this year, compared to earnings of NT$521.3 million, or NT$0.11 per share a year ago, after booking a long-term investment loss worth NT$1.5 billion caused by its investment in a fab located in Israel.
The company decided to downsize its capital by 40 percent in a bid to write off the cumulative losses amounting to some NT$20 billion, several Chinese-language news media reported Aug. 9, citing Macronix's president Miin Wu (
The chipmaker's paid-in capital would drop to about NT$29 billion, from NT$50 billion, after downsizing to be carried out later this year. The company planned to resume public trading of its shares on the local bourse next June, the reports said.
Unlike the rating firm, Macronix painted a rosy outlook for its future performance, hoping to break even in the current quarter, as it predicts sales to jump by at least 30 percent from the previous quarter, driven by strong end demand for communication and consumer electronics products.
The chipmaker expected its gross margin to turn positive from 5 percent to 10 percent in the period from July to next month, and the utilization rate to reach 100 percent from 81 percent during the same time.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
RSS