Nanya Technology Corp (南亞科技) yesterday reduced its capital expenditure by about 19 percent for this year after posting its third straight quarterly loss last quarter, as chip prices dipped for the fifth quarter in a row due to oversupply and flagging demand.
The New Taipei City-based DRAM chipmaker expects its average selling price to drop slightly this quarter from last quarter, following a low single-digit percent decline last quarter.
“We have a mixed picture for the third quarter. Prices for some products are picking up mildly, while some are declining,” Nanya Technology president Lee Pei-ing (李培瑛) told a virtual media briefing.
Photo: Grace Hung, Taipei Times
The DRAM industry is bottoming out judging by positive signs such as slower price declines and slight increases in chip demand, Lee said.
Overall DRAM supply and demand would begin to balance out in the fourth quarter after all suppliers have adjusted their output and capital spending downward, he said.
The company would be flexible about its factory utilization in the second half of this year if customer demand worsens, given the escalating US-China technology dispute and macroeconomic uncertainty, Lee said.
However, Nanya Technology said that it did not expect China’s curb on germanium exports to have a major impact, considering the small portion of the metal it consumes and because there are alternative suppliers outside of China.
The company yesterday reduced its capital spending for this year to NT$15 billion, compared with the NT$18.5 billion it projected at the beginning of this year.
That represents an annual contraction of 28 percent from the NT$20.7 billion it spent last year.
The bulk of this year’s budget would be spent on next-generation DRAM technology, with half of the amount earmarked for the construction of facilities, the company said.
Nanya Technology’s second-quarter losses narrowed to NT$771 million, compared with losses of NT$1.69 billion in the first quarter, thanks mainly to foreign-exchange gains of NT$258 million and NT$722 million in tax rebates, it said.
Operating losses widened to NT$3.19 billion last quarter from NT$2.89 billion the previous quarter, the chipmaker said.
Gross margin worsened to minus-11.2 percent last quarter from minus-8.6 percent in the first quarter. Nanya Technology attributed the deterioration to a low single-digit percent quarterly decline in its average selling price, costs from lower utilization and inventory write-offs.
Gross margin this quarter would continue to face pressure, Lee said.
Nanya Technology has continued to upgrade its technology profile despite the DRAM slump, as it is on track to make its new DRAM DDR5 product available to customers in the middle of next year, Lee said.
The new product would be made using the company’s second generation, 10-nanometer-class, or 1B, technology, he said.
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