The supply of high-end NOR flash memory chips is to remain tight for the remainder of the year due to growing demand from the medical, automotive and industrial segments, memorychip maker Macronix International Co (旺宏電子) said on Thursday.
The Hsinchu-based chipmaker’s comments came amid growing concern that a supply surfeit is looming that would drag down chip prices next quarter.
Macronix is the world’s biggest supplier of NOR flash memory chips.
Market researcher TrendForce Corp (集邦科技) last month said that PC DRAM chip prices would likely fall 2 percent quarterly in the final quarter of this year, ending nine quarters of price hikes, while prices of NAND flash memory chips might face a steeper quarter-on-quarter decline of 10 percent.
“Generally speaking, low-quality and low-density [NOR flash memory chips] will continue to be under oversupply pressure. However, high-quality and high-density [chips] will be in short supply for the rest of this year,” Macronix chairman Miin Wu (吳敏求) told reporters on Thursday.
Marconix has focused on manufacturing high-density and high-quality memory chips in a bid to fend off competition from Chinese latecomers.
“It takes longer for automotive components to go through the whole qualification process, as those components will later be used in cars for about 20 years,” Wu said. “However, as long as the company enters the [supply chain], it will be a stable business.”
Macronix’s long-term efforts have gained traction, as NOR flash memory chips used in the automotive, medical and industrial segments contributed 26 percent to its total NOR flash memory revenue in the second quarter, compared with 12 percent a year earlier, company data showed.
The revenue contribution from those three segments would continue to rise in the foreseeable future, as a growing number of memory chips are equipped in a wider range of medical devices, such as blood sugar monitoring devices, and in vehicles, Wu said.
Commenting on an escalating US-China trade war, Wu said that the company has found that some clients were considering moving their production lines back to Taiwan or to Southeast Asian nations to circumvent US tariffs.
US President Donald Trump on Monday said that the US would impose 10 percent tariffs on US$200 billion of Chinese imports, on top of 25 percent tariffs already levied against about US$50 billion of Chinese goods.
Trump also threatened to tax all imports from China to the US.
The trade dispute between the world’s two largest economies would dampen consumer demand to some extent, which might indirectly affect Macronix’s business in the second half of the year, Wu said.
Normally, revenue in the second half of the year accounts for 60 percent of the company’s total annual revenue, but this year’s amount might be a little lower, he said, citing uncertainty due to the trade war.
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