Adata Technology Co (威剛科技), the world’s second-largest memory module maker, saw its shares increase by 1.76 percent yesterday after reporting NT$2.35 billion (US$78.28 million) in pre-tax profit for the first 10 months this year.
Earnings per share soared to NT$10.21 per share, the company said. The latest figure means the company is poised to surpass its 2009 earnings of NT$10.67 per share, or NT$2.16 billion.
Adata attributed the strong performance primarily to the unresolved and worsening worldwide supply shortage of memory chips, which includes PC DRAM chips.
“Due to a severe shortage of mainstream DDR4 DRAM, PC vendors are having to reorient their purchase strategies to buy DDR3 DRAM in order to ship products smoothly to customers,” Adata said in a company statement on Nov. 9.
Adata expects DRAM supply constraints to last until next year as it will take time to create new production lines and boost manufacturing yield rates to a satisfactory level.
This is despite recent speculation that certain South Korean memorychip makers plan to expand their DRAM capacities to cope with the rapidly growing demand from cloud-computing devices, Adata said.
“South Korean companies have foreseen further price hikes in the first quarter next year as global DRAM makers have been focusing on technological upgrades over the past three years, rather than investing heavily on capacity expansion,” Adata said. “That will help extend the latest DRAM up-cycle, which is the longest in the industry’s history. It will also be a boon for DRAM companies in terms of profit.”
Adata said that customers continued to increase orders during the Mid-Autumn Festival and national holidays in China last month.
Growth in orders helped increase DRAM’s contribution to Adata’s revenue to 53 percent, totaling NT$2.73 billion last month.
The solid-state drive business recovered with strong growth in shipments, after being in the doldrums for two months, and accounted for a 20 percent share of Adata’s revenue last month.
Revenue from memory cards and USB stick drives also rose 3.18 percent from the previous month, contributing more than 15 percent of last month’s revenue, it said.
Adata’s stock rose 1.75 percent to NT$87 in Taipei trading yesterday, outperforming the TAIEX, which rose 0.4 percent.
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