DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted a net profit of NT$1.93 billion (US$64.11 million) for the first quarter, or earnings per share of NT$0.63, a 49.9 percent quarter-on-quarter increase as growing remote schooling, telecommuting and online shopping helped fuel demand for computers, servers and networking devices amid the COVID-19 pandemic.
On an annual basis, net profit plunged 46.2 percent from NT$3.59 billion.
The New Taipei City-based company expects the growth momentum to carry into this quarter and next quarter, as demand for Internet-enabled devices is expected to continue as European nations and the US appear to be headed for extended lockdowns.
However, the firm remains cautious about the second-half outlook, as the pandemic could take a severe toll on the global economy and unemployment if the coronavirus is not reined in by the third quarter.
“In the short term, demand for computers, servers and networking equipment will continue to rise, offsetting a decline in demand for smartphones. Overall, the market looks quite stable,” Nanya Technology president Lee Pei-ing (李培瑛) told reporters in a teleconference.
“Messages from our customers indicate that the second and third quarters will be good quarters [for PC and server DRAM],” Lee said.
Strong demand for PCs and servers would help boost average selling prices this quarter, while shipments are to remain flat from last quarter, he said.
DRAM used in PCs and servers contributed 20 percent to the chipmaker’s revenue of NT$14.42 billion in the first quarter.
Nanya Technology said telecoms did not postpone their deployments of 5G networks, although the pandemic was negatively affecting shipments of 5G smartphones.
For the full year, the chipmaker is still aiming to grow its shipments by between 15 and 18 percent year-on-year.
With the COVID-19 outbreak seemingly under control, Nanya Technology said orders from Chinese clients are stabilizing.
China accounts for about 25 percent of the chipmaker’s shipments.
Gross margin fell for a sixth consecutive quarter to 23.8 percent in the first quarter from 25.7 percent in the fourth quarter last year due to unfavorable foreign-exchange rates.
The company said it would maintain capital expenditure at NT$9.2 billion for this year, as most of the investment is earmarked for developing next-generation technologies.
That is a 67 percent increase from last year’s NT$5.5 billion.
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