DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported its smallest losses in three quarters as recovering demand helped drive higher average selling prices and factory utilization.
Losses improved significantly to NT$1.21 billion (US$37.79 million) during the quarter ending on March 31, compared with losses of NT$2.48 billion in the previous quarter and losses of NT$1.69 billion a year earlier, the company said in a statement.
Gross margin improved to minus-2.9 percent, the best in five quarters, thanks to a high-single-digit percentage increase in average selling prices and lower idle equipment costs, Nanya Technology president Lee Pei-ing (李培瑛) told a virtual media briefing.
Photo: Grace Hung, Taipei Times
As its average selling price is expected to increase by a double-digit percentage this quarter, Lee said it is highly possible that gross margin would swing back into positive territory this quarter, an indicator that Nanya Technology is continuing to progress toward a turnaround.
“There is a chance that the average selling price will improve quarter by quarter,” he said. “We are more optimistic about DRAM price improvements” due to the effects of a massive earthquake that struck off the east coast on Wednesday last week.
Samsung Electronics Co, SK Hynix Inc and Micron Technologies Inc have resumed price negotiations with customers following a brief suspension awaiting damage assessments after the quake, which measured 7.2 on the Richter scale and magnitude 7.4 on the moment magnitude scale.
The top three companies have become more aggressive about pricing during the latest round of negotiations with customers, which could boost DRAM prices, Lee said.
Nanya Technology said the global DRAM industry would stage a gradual recovery this year, adding that the supply of DRAM chips could tighten after a bulk of the world’s DRAM capacity is used to produce high-density or high-bandwidth memory chips for artificial intelligence (AI) servers rather than standard servers.
On the demand side, the arrival of AI PCs later this year would increase the consumption of DRAM chips, coupled with increases in sales of premium smartphones in China, the company said.
However, it remains to be seen when the company will reverse six straight quarters of operating losses, given damage from the earthquake and volatile foreign exchange rates, it said.
The company’s production has been fully restored after a brief suspension due to the quake, it said.
In the first quarter, operating losses improved to NT$2.92 billion, compared with losses of NT$4.05 billion in the previous quarter and losses of NT$2.89 billion a year earlier, the company said.
Nanya Technology yesterday raised its capital spending this year 30 percent to NT$26 billion from an earlier estimate of NT$20 billion.
Shipments are expected to increase more than 20 percent annually this year, it said.
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