Powerchip Semiconductor Corp (力晶半導體), the nation’s No. 2 computer memory chipmaker, yesterday reported its second straight quarterly profit of NT$3.54 billion (US$112 million), bolstered by a sustainable recovery in PC demand that lifted chip prices to record highs.
The company added that it would raise capital spending by 18 percent to about NT$13 billion this year from its previous budget of NT$11 billion to accelerate technology migration to produce cost-efficient DDR3 chips, which is replacing DDR2 as the mainstream PC memory chips.
First-quarter earnings were nearly double the NT$1.6 billion Powerchip made in the final quarter of last year, when the chipmaker ended 10 consecutive quarters of losses and led its local peers in emerging from the industry’s longest and severest downturn.
In the first quarter of last year, Powerchip posted a loss of NT$6.29 billion, the company said in a filing to the Taiwan Stock Exchange.
Rising DRAM chip prices, together with Powerchip’s “smooth capacity revival and a further increase in the [sales ratio] of higher-margin DDR3 products led to the turnaround in operations,” Powerchip spokesman Eric Tang (譚仲民) said in a company statement released yesterday.
Gross margin and operating margin bounced back to 27 percent and 22 percent respectively in the first three months, the statement said. The company did not provide comparative figures.
Demand in the second quarter “looks quite good,” Tang told reporters after a media briefing yesterday.
“Sales will increase month on month ... as customers’ orders indicate,” Tang said.
To cope with the increasing demand, Powerchip aims to make chips using more advanced and cost-efficient 63-nanometer technology next quarter at the earliest, Tang said.
Separately, Powerchip’s board yesterday approved a proposal to cut the company’s capital by 38 percent, or NT$34.38 billion, to improve its financial structure. After the adjustment, the chipmaker will have NT$56.09 billion in capital.
The capital reduction program is expected to boost the net value of Powerchip to NT$6.90 per share, from NT$3.31 a share at the end of last year, Tang said.
The board also approved a proposal to issue 800 million new shares — to be sold either domestically or abroad via global depositary receipts — and a private placement of 300 million new shares to raise funds to purchase equipment and materials, as well as repay debt. The proposal is subject to shareholders’ approval on May 26.
Rival Nanya Technology Corp (南亞科技), the nation’s top DRAM supplier, is scheduled to release its first quarter results today.
The contract price of benchmark DDR2 chips edged lower by 0.2 percent to US$2.97 per unit yesterday, which is still higher than this month’s contract price of US$2.44 per unit, Taipei-based market research firm DRAMeXchange Technology Corp (集邦科技) said.
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