Adata Technology Co (威剛), a supplier of memory modules and solid-state drives (SSDs), yesterday posted its best quarterly net profit in 14 quarters on the back of rising prices.
During the three-month quarter to March, net profit surged 57.18 percent to NT$707 million (US$25.27 million), from NT$450 million last year. On a quarterly basis, net profit more than doubled from NT$317 million.
Earnings per share rose to NT$2.94, compared with NT$2.12 a year earlier and NT$1.41 in the previous quarter.
Photo: Grace Hung, Taipei Times
The company said that the first quarter was exceptionally strong, bucking a seasonal downtrend, adding that prices for DRAM products extended a pickup in the final quarter of last year, while those of NAND flash products began increasing faster than expected.
That helped the company’s gross margin improve to 19.07 percent last quarter from 12.44 percent a year earlier, but it was lower than the previous quarter’s 23.56 percent.
Adata is bullish about the company’s business performance for the rest of this year, as the memory industry is entering a new epicycle, and expects robust demand to continue driving prices of DRAM and NAND flash products higher in the coming quarters, the company said in a statement.
“As the world’s major suppliers from South Korea and the US expect a supply shortage this year, Adata has built up inventory of memory chips and SSD controllers to cope with rising demand,” chairman Simon Chen (陳立白) said in the statement.
Adada had accumulated key components worth NT$10 billion as of the end of last quarter, a record high, the statement said.
“Demand for PCs, servers and mobile phones is expected to continue to show strong momentum in the second and third quarters. Demand from the automotive segment is also expected to grow,” Chen said. “As DRAM supply constraints worsen in the second quarter, price hikes would be more drastic than in the first quarter.”
A cryptocurrency mining boom is also stimulating demand for high-density SSD products, which is to further lift NAND flash product prices, Chen said.
Adata orders for SSDs soared four to fivefold last month, compared with orders received in March, benefiting from increased mining of Chia, a new cryptocurrency, the company said.
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