Macronix International Co (旺宏電子), the world’s biggest supplier of NOR flash memory chips, yesterday said that revenue this quarter would fall further from last quarter’s NT$7.28 billion (US$225.3 million), as customers digest inventory toward the end of this year.
Amid a slump in customer demand, Macronix slashed capital expenditure for this year by about 12 percent to NT$7.9 billion from an estimate of NT$9 billion it made three months ago.
The spending would be even lower next year as the company said it would halt capacity expansion and focus on depleting its inventory.
Photo: Grace Hung, Taipei Times
Next year, factory utilization and inventory are forecast to remain at similar levels as this year, Macronix chairman Miin Wu (吳敏求) told an online investors’ conference.
The company does not expect to see a significant pickup next year, Wu added.
“If there is any, it would arrive in the second half of next year,” he said.
The company reported a net loss of NT$408 million last quarter, following a net profit of NT$71 million in the previous quarter. During the first three quarters of this year, Macronix lost NT$692 million, which translated into losses per share of NT$0.37.
Gross margin fell to 25.9 percent in the first nine months, compared with 46.9 percent in the same period last year, as the chipmaker cut 25 percent of its factory utilization to cope with sluggish demand.
The company also booked losses on inventory valuation totaling NT$2.26 billion during the first nine months of this year, and expects to book more inventory losses this quarter, as demand remains weak.
“This year is a very bearish year in terms of market demand. We are seeing many customers digesting inventory at a very slow pace, particular customers from China and Japan,” Wu said.
By product, demand for ROM chips, primarily from Japan’s Nintendo Co, would be slow this quarter as some game titles are likely to hit the market in the first quarter of next year, Wu said.
The ROM business accounted for 38 percent of Macronix’s total revenue last quarter.
Demand for NOR flash memory chips would be stable this quarter and those used in vehicles would continue to grow, he said, adding that the company has seen early signs of a rebound.
The auto segment last quarter overtook the computer segment as the biggest NOR flash memory chip revenue contributor, the company said.
Overall, NOR flash memory chips accounted for 50 percent of Macronix’s revenue last quarter, it said.
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