Memorychip maker Macronix International Co (旺宏) yesterday reported that net profit rose six-fold last quarter from the previous quarter on the back of stronger-than-expected demand from Nintendo Co, while seasonal pickup drove inventory levels down significantly.
Net profit increased to NT$1.85 billion (US$60.49 million) in the quarter ended on Sept. 30, compared with NT$264 million in the second quarter, Macronix said.
On an annual basis, net profit dropped 3 percent from NT$1.92 billion, due to price erosion, the company said.
Revenue soared 59 percent quarter-on-quarter to NT$11.91 billion last quarter, it said, adding that ROM chips became its largest revenue source, accounting for 51 percent, a spike from 29 percent in the prior quarter.
Gross margin climbed to 30 percent last quarter from 27 percent in the second quarter, attributable to fewer inventory write-downs, the firm said.
A substantial reduction in inventory helped cut inventory write-downs by 60 percent to NT$400 million from NT$1 billion in the second quarter, the Hsinchu-based chipmaker said.
That provided some relief to investors, who have been watching whether its substantial inventory would translate into shipments and revenue.
Macronix usually builds inventory on requests by its key customer, Nintendo, in preparation for the year-end shopping season.
“The company’s inventory is well-managed,” Macronix chief financial officer Paul Yeh (葉沛甫) told investors.
It expects inventory to drop further this quarter, primarily due to increases in demand.
“Our inventory will go down substantially, as we are shipping more products to cope with seasonal demand,” Yeh said. “Besides, we are cutting production of some low-end products.”
Macronix chairman Miin Wu (吳敏求) said that shipments of flash memory chips would increase this quarter on a quarterly basis, with demand beating expectations and prices stabilizing.
However, ROM chip shipments would be lower this quarter compared with last quarter, as Nintendo has pushed forward the shipment schedule to last month from this month, Wu said.
Macronix began shipping its new 19-nanometer single-level cell (SLC) NAND flash memory chips used in set-top boxes to US customers, which would boost shipments as well, he said.
Revenue from the SLC NAND chips would remain insignificant this year, but Macronix sees an upward trajectory, Wu said.
“We are confident that the 19-nanometer SLC NAND memory chips will have a significant contribution next year,” Wu said. “Customers are showing strong interest in this new product.”
Macronix aims to ramp up production of new 3D 192-layer NAND memory chips by end of 2021, Wu added.
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