Macronix International Co (旺宏電子), the world’s biggest supplier of NOR flash memory chips, yesterday posted its strongest first-quarter earnings as robust demand boosted chip prices and offset the effects of component shortages.
Macronix said it expects the upward trend in prices to continue this quarter, or be flat, given strong demand from customers.
COVID-19 lockdowns in China caused an uneven supply of key components, but that would not affect orders, the company said.
Photo: Grace Hung, Taipei Times
“China’s ‘zero COVID-19’ policy has affected its economic growth to some extent,” Macronix chairman Miin Wu (吳敏求) said during an online investors’ conference. “Low-end consumer electronics suffered the brunt, but that is not the market we are targeting.”
About 80 percent of its chips are used in non-consumer electronics and non-PC applications, Wu said, brushing off a major investment consulting company’s bearish view of Macronix’s business outlook.
While customers in China scaled back some orders due to the COVID-19 curbs, orders from Taiwan, the US, Japan and Europe all look brisk, he said.
In responding to an investor’s question about his comments on Chinese rival Yangtze Memory Technologies Co (長江存儲) winning orders from Apple Inc, Wu said Macronix is not interested in working with Apple, as it would not benefit his firm.
“We are targeting high-quality applications for our NAND flash memory chips, rather than the mass market,” Wu said.
Macronix produces mainly low-density NAND flash memory chips used in vehicles, industrial devices and 5G base stations, rather than high-density NAND flash chips for true wireless stereo, he said.
Net profit last quarter rose 220 percent to NT$2.93 billion (US$99.97 million) from NT$916 million a year earlier, but dropped 21 percent quarterly from NT$3.69 billion.
Macronix expects flash memory prices to be flat, or to climb further this quarter, it said.
Gross margin climbed to 48.3 percent last quarter, from 34.3 percent a year earlier and 47.2 percent the previous quarter.
Gross margin, excluding an inventory loss provision of NT$115 million, jumped 49.3 percent, it said.
This year, gross margin could be similar to last quarter, indicating an improvement from 41.6 percent last year, it said.
Macronix plans to spend NT$16 billion on new facilities and equipment this year.
The company’s new 5B Fab is expected to start cranking out a small volume of chips at the end of this year.
Macronix said it is working on a plan to increase its cash dividend distribution to about NT$2 per common share, as it is seeking a long-term, stable dividend policy.
The chipmaker plans to distribute NT$1.8 per common share, representing a payout ratio of 27.78 percent based on last year’s earnings per share of NT$6.48.
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