Powerchip Semiconductor Corp (力晶半導體), the nation’s top maker of memory chips used in computers, yesterday posted record quarterly losses as a deteriorating economy added pressure to the industry’s most severe slump on a glut after demand dwindled unexpectedly.
During the third quarter, the Hsinchu-based company’s quarterly net losses swelled to NT$15.02 billion (US$459.4 million), marking the sixth consecutive quarterly losses. The company reported a net loss of NT$1.9 billion a year ago and NT$7.27 billion in loss for the second quarter.
“After one-and-a-half years of digestion of excessive supply, I had thought supply would have matched demand in the second half. But the global financial crisis” changed all that, company chairman Frank Huang (黃崇仁) told investors.
CUT
Huang said a joint output cut among memory chipmakers could help the industry hit bottom in the current or next quarter.
To cope with bleak industry prospects, Powerchip said it would cut spending on new equipment by more than two-thirds next year to less than NT$10 billion, compared with NT$34.5 billion planned for this year, company president Brian Hsieh (謝再居) said.
Powerchip said it would also suspend construction of a new advanced plant, which was scheduled to begin production next year, he said.
“If you ask me when spring will come, I’ve got no answer. We are now in an ice age rather than in harsh winter as you were told [three months ago],” Hsieh said. “It is turning into a survival game.”
In the third quarter alone, the price of benchmark dynamic random access memory (DRAM) chips plunged about 38 percent to average at US$1.23 per unit after plunging 85 percent last year on severe glut, Taipei-based market researcher DRAMeXchange Technology Inc (集邦科技) said.
“Our efforts now are focusing on maintaining cash balance, which is crucial [to weathering the downturn], as well as more cost saving measures,” Hsieh told investors, who saw cash position as a crucial factor in surviving the downcycle in the DRAM industry.
The reduction in capital spending would bring down annual output growth to about 30 percent to 40 percent next year, compared to 65 percent expansion this year and 90 percent last year, Powerchip said.
“The plan to sharply cut capital spending along with more cost-saving efforts will assure investors that the company will not disappear,” said Kenneth Yang (楊克勤), a semiconductor analyst at Primasia Securities Co.
Regarding the third quarter, Powerchip has NT$17.6 billion in cash and tradable securities on hand.
STRATEGY
In the final quarter of this year, Powerchip also intends to cut another 10 percent to 15 percent in output by temporarily shutting down less cost-efficient plants and encouraging employees to go on leave.
Powerchip hopes to accomplish further output reduction, which could drive up chip prices, and to migrate more manufacturing to next-generation plants to give it an edge over its competitors.
Shares of Powerchip rose 0.42 percent to NT$4.77 yesterday, outperforming the benchmark TAIEX index, which was up 0.22 percent.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS