Macronix International Co (旺宏電子), which supplies chips to Japanese game console maker Nintendo Co, posted its weakest quarterly earnings in seven quarters because of high customer inventories and one of its key clients postponing a product launch.
The Hsinchu-based firm’s fourth-quarter net income slid 59 percent to NT$1.12 billion (US$38.24 million), from NT$1.82 billion a year ago. It was also its lowest quarterly earnings since the second quarter of 2009, when the firm made NT$980 million.
Fourth-quarter net profit was also down 39 percent from the previous quarter’s NT$2.76 billion.
The chipmaker attributed the decline in part to NT$132 million in foreign-exchange losses as the NT dollar strengthened against the greenback and the yen.
Revenues declined 33 percent to NT$5.51 billion in the fourth quarter from the third quarter’s NT$8.16 billion, falling short of the company’s target range of NT$5.8 billion to NT$6 billion.
“One of our major customers asked us to delay [chip] shipments because it was not able to launch its latest product as scheduled during the Christmas holiday,” Macronix president Lu Chih-yuan (盧志遠) told a media briefing.
However, with that client now beginning shipments of its new product, this quarter “will be the best first quarter ever in terms of revenues,” Lu said. “Demand looks solid.”
Revenues this quarter could rise as much as 24 percent to NT$6.8 billion, buckling the seasonal downtrend, as shipments of ROM memory chips used in consumer electronics, such as game consoles, could grow 40 percent quarter-on-quarter.
Demand for NOR flash chips, which account for about half of Macronix’s sales, is expected to rebound substantially this quarter from last quarter, which could lend some support to chip prices, Lu said.
Prices are forecast to slip by 3 percent to 5 percent this quarter, an improvement from last quarter’s 20 percent drop, he said.
“Demand will improve for all segments [PC, consumer electronics and communications] ... Customers are almost at the end of their inventory digestion,” Lu said.
However, the firm’s gross -margin is forecast to fall to a range of 38 to 42 percent this quarter from 54 percent last quarter, as the company starts booking depreciation costs after ramping up a new advanced 12-inch factory.
Except for the new plant, all of Macronix’s plants would be running at almost full capacity, Lu said.
Macronix bought the factory from local PC memory chipmaker ProMOS Technologies Inc (茂德科技) last year in order to quickly expand its ability to meet -customer demand.
The firm plans to spend a record NT$17.6 billion in capital expenditure this year mainly to ramp up the new factory. Last year, the chipmaker spent NT$16.4 billion on new equipment.
Macronix’s net profit expanded 37 percent to NT$7.78 billion last year — its highest level since 2000.
Its shares rose 0.65 percent to NT$23.10 yesterday, outperforming the benchmark TAIEX which gained 0.49 percent.
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