DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted a 79 percent quarterly decline in net profit, which it blamed on price declines and a surtax on undistributed earnings.
A non-operating loss of NT$457 million (US$14.25 million) by Inotera Memories Inc (華亞科技), its venture with US-based Micron Technology Inc, also weighed on the bottom line, the company said.
Net profits plunged from NT$1.85 billion in the first quarter to NT$397 million after paying a surtax on undistributed earnings of NT$765 million. On an annual basis, net profits dipped 91 percent from NT$4.25 billion.
Pre-tax profits shrank at a slower rate of 23.6 percent to NT$3.16 billion last quarter from the previous quarter’s NT$4.14 billion, according to the company’s financial statement.
Listed companies in Taiwan are required to pay a 10 percent surtax on undistributed earnings. The tax is usually imposed on second quarter financial results after shareholders approve earnings distribution plans.
Gross margin fell to 28.4 percent last quarter from 32.7 percent in the first quarter due to a 4.5 percent decline in average selling prices, company data showed.
Nanya president Lee Pei-ing (李培瑛) said that net profits would improve in the third quarter.
Price declines in DRAM chips for consumer electronics such as set-top boxes are decelerating and those for PC DRAM chips are rebounding, he said.
“Overall, the third quarter will be a stable period compared with the second quarter,” Lee said. “We believe we are moving toward a resilient fourth quarter.”
The optimism was based on seasonal demand for DRAM chips used in TVs, increasing DRAM content in mobile phones and increasing demand for servers, he said.
Nanya has budgeted NT$25.2 billion for capital spending this year, mostly on migrating to 20 nanometer technology.
As for Micron’s plan to acquire the remaining 67 percent stake in Inotera, “we are making progress. We will provide updates later this year,” Lee said.
Micron originally planned to wrap up the NT$130 billion acquisition deal this month by buying Inotera shares from Nanya and other members of Formosa Plastics Group (台塑集團).
As part of the deal, Nanya could subscribe to an unspecified amount of Micron shares or convertible bonds or cash.
The deal also includes next-generation technology transfer from Micron.
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