DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said it would hold on to 30 percent of its overall capital expenditures earmarked for this year to use next year, given slackening market demand.
That would reduce the company’s spending on new facilities and equipment to about NT$10.7 billion (US$370.13 million) this year, instead of the NT$15.7 billion budgeted.
The move is in line with its bigger competitors’ conservative outlook about the memory industry.
Photo: Lisa Wang, Taipei Times
“That is primarily because of the overall [changes] in market situation,” Nanya Technology president Lee Pei-ing (李培瑛) told a media briefing at the company’s headquarters in New Taipei City’s Taishan District (泰山). “We have a conservative view of capital expenditures.”
However, the changes in capital spending would not affect its technological migration, Lee said.
Nanya Technology is on schedule to start pilot production of its 1A process technology this quarter, paving the way for revenue contribution from the technology at the end of next year, he said.
The chipmaker also expects the supply-demand situation to stabilize in the first half of next year, given limited supply growth and low inventories.
That would lead to a rebound in memorychip prices, it said.
As for the impact of Washington’s export restrictions on Huawei Technologies Co (華為), Lee said it should be rather short-lived given the Nanya’s broad customer portfolios and product lineup.
The firm supplies chips to more than 700 customers, he said.
The impact could last for two quarters, Lee said, echoing Micron Technology Inc’s recent comments on the loss of Huawei orders.
Other Chinese mobile phone makers would fill the void left by Huawei, he said.
Nanya Technology stopped shipping memory chips to Huawei as of Sept. 15 as the US restrictions took effect, and is waiting for the US government to approve it resuming shipments to Huawei.
As speculation swirled that Chinese memorychip maker Yangtze Memory Technology Corp (長江存儲) could be Washington’s next target, Lee said that such a move would not have much of an effect on his firm, given the Chinese company’s small market share.
Nanya also reported a contraction of 50 percent last quarter in net profit, to NT$1.61 billion, compared with NT$3.22 billion the previous quarter, and the lowest since the fourth quarter of last year.
Revenue was NT$15.32 billion, while its gross margin dipped to 25.9 percent last quarter from 30.6 percent in the second quarter.
The company attributed the weakness to a low single-digit percentage decline in average selling prices and shipments last quarter, as well as unfavorable foreign exchange rate and higher tax payments.
Nanya Technology expects sales of DRAM chips used in servers to drop mildly on a quarterly basis this quarter, while DRAM chips used in other applications such as laptops and mobile phones are forecast to pick up.
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