Memorychip maker Nanya Technology Corp (南亞科技) yesterday said it has seen a mild pickup in DRAM demand for servers and PCs, indicating that the industry downturn had bottomed out.
An improvement in demand for server DRAM chips is a positive sign for the industry, as the server DRAM segment suffered the brunt of the slump that began in the third quarter of last year as excessive inventories and oversupply drove down chip prices, the company said.
Servers are the biggest consumers of DRAM chips, accounting for about 25 percent of DRAM production worldwide.
Nanya Technology said it is conservative about the company’s business outlook for the first half of this year, as a wobbling world economy, the US-China trade dispute and chip supply from Intel Corp have already dealt a blow to the DRAM industry, but the pickup “raises the likelihood that the second quarter might be better than the first quarter,” Nanya Technology president Lee Pei-ing (李培英) told a media gathering in Taipei. “The second quarter should be the trough, as the third quarter is traditionally a peak season and customers tend to be more proactive about ordering.”
Nanya Technology expects recovering demand would help provide a cushion to falling DRAM prices over next few months, Lee said.
To better weather the downturn, the chipmaker plans to diversify its product portfolio to minimize downside risks, leveraging its cost-effective 20-nanometer technology.
To reach that end, the company plans to hire more than 100 research and development engineers this year, it said.
Nanya Technology plans to roll out more DDR4 chips for servers and consumer electronics such as smartphones and wearable devices.
Commenting on the threat from China, Lee said that he believes it would take time for it to catch up with the world’s major memorychip makers given its lack of related technologies, manufacturing equipment and raw materials.
Separately, the company’s board of directors yesterday proposed the distribution of a cash dividend of between NT$7.09 and NT$7.15 per common share.
That implies about a 11.5 percent dividend yield based on the stock’s closing price of NT$62 on Tuesday.
The distribution marks the highest level in the company’s 24-year history after it posted strong earnings for last year.
Nanya Technology saw its net profit slide a mere 2.3 percent to NT$39.36 billion (US$1.28 billion) from NT$40.3 billion in 2017. Earnings per share were NT$12.8.
The board also approved an employee bonus payment totaling NT$1.74 billion this year, up 28 percent from NT$1.36 billion last year.
It also gave the green light to capital expenditure of NT$10.6 billion for this year, down from the NT$20.4 billion it spent last year.
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