Macronix International Co (旺宏), the world’s biggest supplier of NOR flash memory chips, yesterday said that demand is surprisingly strong through next year, with some customers even seeking year-long contracts, as it rejected Morgan Stanley’s bearish view on memory stocks.
The Hsinchu-based company said that the growth momentum is also backed by new orders and new clients amid rising demand for servers, automotive, medical and industrial devices, as well as 5G-related applications, from the US, Europe and Japan.
In addition, Macronix is receiving orders transferred from rivals, whose factories were temporarily shut down due to natural disasters or other factors, it said.
Photo: Grace Hung, Taipei Times
“We are not affected by the uneven supply of components,” Macronix chairman Miin Wu (吳敏求) told investors during an online media briefing. “Our book-to-bill ratio is so high that it surprises us.”
The company’s book-to-bill ratio remained above 1, while revenue has reached new highs over the past 10 months.
Macronix posted record revenue of NT$4.28 billion (US$153.58 million) last month, up 36.4 percent year-on-year.
“Demand for automotive devices has been increasing,” Wu said. “We are seeing some prominent companies, including those from Japan, are turning to Macronix for help, as their suppliers cannot provide any more chips.”
“We are seeing good business through next year,” he said, adding that Macronix has clinched long-term supply agreements at good prices.
Despite the strong revenue growth and rosy prospects, Macronix’s stock has fallen more than 17 percent to NT$37.65 yesterday from NT$45.45 on Aug. 5.
The company blamed the results on Morgan Stanley’s downgrade of its stock to “equal weight” along with other DRAM chipmakers.
In a research note titled “Memory: Winter is coming,” Morgan Stanley analysts cut Macronix’s target price to NT$44 from NT$54.
The researcher warned about a pullback in chip demand, as the industry is entering the late stage of an upcycle.
The price hikes enjoyed by chipmakers are likely to reverse next year, it said.
Macronix said that Morgan Stanley has mistakenly put NOR flash memorychip makers alongside DRAM chipmakers.
DRAM chipmakers might see some weakness due to component supply bottlenecks, but that is not the case for NOR makers, Wu said, adding that the bearish comments were groundless.
The outlook for NOR flash memory chips remains strong in the second half of the year, Wu said.
Automakers are likely to face a new headache with shortages of flash memory chips, he said.
Macronix shareholders yesterday approved a cash dividend distribution of NT$1.2 per common share.
That represents a payout ratio of about 41 percent based on the company’s earnings per share of NT$2.9 last year.
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
Luxury fashion powerhouse Prada SpA has acknowledged the ancient Indian roots of its new sandal design after the debut of the open-toe footwear sparked a furor among Indian artisans and politicians thousands of miles from the catwalk in Italy. Images from Prada’s fashion show in Milan last weekend showed models wearing leather sandals with a braided design that resembled handmade Kolhapuri slippers with designs dating back to the 12th century. A wave of criticism in the media and from lawmakers followed over the Italian brand’s lack of public acknowledgement of the Indian sandal design, which is named after a city in the
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
RSS