Nanya Technology Corp (南亞科技), the nation’s largest computer memory chipmaker, yesterday posted its first positive quarterly earnings in 10 quarters as stronger-than-expected PC sales boosted memory chip prices.
Last quarter, Nanya Technology earned NT$211 million (US$6.6 million) after average selling prices spiked 44 percent quarter-on-quarter, the Taoyuan-based chipmaker said in a company statement.
During the period, shipments only edged up 2 percent, the company said.
It was the company’s first profitable quarter since the first quarter of 2007.
For the full year, Nanya posted a loss of NT$20.74 billion as the global economic woes exacerbated prolonged industrial downturn driven by overcapacity. The results were an improvement from losses of NT$36.73 billion in 2008.
“The results are quite good and industry prospects look good too, which may trigger a new wave of upward [earnings] revisions,” said Rick Hsu (徐稦成), semiconductor industry analyst at Nomura Securities Co Ltd’s Taipei branch.
Hsu, however, was cautious about putting Nanya Technology on his “buy” list, as the stock is relatively expensive. He has a “reduce” rating on the company.
Sending more positive messages, Nanya Technology also expects a brief price correction for memory chips, or dynamic random access memory (DRAM), in the first three months of this year on oversupply.
“Our customers are forecasting a better-than-expected business environment during the second half,” Nanya Technology spokesman Pai Pei-lin (白培霖) said. “We are seeing more multinational corporations starting to evaluate replacing their PCs.”
Market researcher Gartner is forecasting that PC shipments will increase 12.6 percent this year to 336.6 million units from 306 million units last year.
Increasing demand may help DRAM prices rebound from the second quarter and extend the upturn into the second half on potential supply constraints, driving the average price higher than this year’s US$2 per unit, Pai said.
To keep up with demand, Nanya Technology plans to boost capital spending by 37 percent to more than NT$20 billion and to speed up migration to new-generation 50-nanometer and 42-nanometer technologies, which would allow the chipmaker to make more chips at lower cost. With this new budget, the firm expects output to grow 45 percent year-on-year.
Last year, Nanya Technology spent NT$14.6 billion on new equipment.
In related news, Inotera Memories Inc (華亞科技) is also planning to dramatically increase its capital spending this year to NT$52 billion from an earlier estimate of NT$42 billion, compared with last year’s NT$13.2 billion.
Inotera is a joint venture between Nanya Technology and US memory company Micron Technology Inc.
Yesterday, Inotera also said it returned to profit last quarter after two years of losses.
Inotera made NT$475 million in net profit in the final quarter of last year. The company, however, still booked a NT$11.48 billion loss for the whole of last year.
Powerchip Semiconductor Corp (力晶半導體), the nation’s No. 2 DRAM maker, yesterday said it had swung into profit in the fourth quarter, making more than NT$1.6 billion in net income, helped by improving chip prices.
Rexchip Electronics Corp (瑞晶電子), a joint venture between Powerchip and Japan’s Elpida Memory Inc, also earned NT$3.4 billion, Powerchip said in a statement.
To enhance cost competitiveness, Powerchip said it planned to join forces with Elpida and Rexchip to buy new equipment to upgrade from 65-nanometer technology to 45-nanometer technology during the second half of this year.
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