Adata Technology Co (威剛科技) yesterday posted NT$276 million (US$9.18 million) in pretax profit for July, the latest sign that the world’s second-biggest memory module supplier is staging a rebound in profitability from a tough second quarter.
The figure surpassed the firm’s average monthly pretax profit of NT$230 million in the January-to-July period, a filing with the Taiwan Stock Exchange showed.
In the seven-month period, Adata accumulated NT$1.61 billion in pretax profit, the filing showed.
In addition to the pickup in its core business, nonoperating gains from lottery subsidiary Taiwan Sports Lottery Co (台灣運彩) and from equity investments helped drive July’s pretax profit, Taipei-based Adata said.
Operating income totaled NT$84.31 million in July, bringing the firm’s operating income in the first seven months of this year to NT$1.21 billion, the filing showed.
“Constrained supply of DRAM chips next quarter might exceed our expectations. A shortage in supply of DDR4 chips will be the severest,” Adata said in the filing, referring to mainstream double data rate fourth-generation DRAM chips.
Increasing demand for smartphones and cloud-enabled servers is squeezing DRAM chip supply, the firm said.
As the momentum is swinging back, the company said it expects a tight supply of memory chips to prompt a new round of price hikes through next quarter and even into early next year.
In the second quarter of the year, Adata saw its pretax profit plunge 58 percent quarter-on-quarter from NT$933 million to NT$396 million, as sluggish PC demand weighed on memory prices amid a slow season.
Net profit last quarter sank 60 percent quarterly from NT$778 million to NT$310 million, company data showed.
Adata shares yesterday dropped 0.64 percent to NT$78.2, ending a three-day winning streak, Taipei Exchange data showed, despite the company having launched a share buyback program to buoy its stock price.
Adata plans to buy 6 million of its shares at between NT$54 and NT$113.6 per share in the program, which started on Thursday and is to run through Nov. 13.
However, Adata shares have still risen 48.39 percent since the beginning of the year, beating a 13.97 percent rise on the over-the-counter bourse over the same period, exchange data showed.
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