DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said the US tariffs would not have a devastating effect on the company, as it is working with customers to mitigate cost increases during the 90-day reprieve of US President Donald Trump’s “reciprocal” tariffs.
Despite a baseline duty of 10 percent that remains in place under Trump’s tariff policy, the company only exports a limited portion of its chips directly to the US, although US customers accounted for a significant portion of its revenue, Nanya Technology president Lee Pei-ing (李培英) told an online earnings conference.
The latest development is already a positive twist as compared with a week ago, Lee said.
Photo: Grace Hung, Taipei Times
“Our customers are seeking to reduce the tariff impact. We are also cooperating with them to make some adjustments,” he said.
US-based Micron Technology Inc started to impose a tariff-related surcharge on some products such as memory modules and solid-state drives from Wednesday, Reuters reported on Tuesday.
Nanya Technology has no plans to hike DRAM prices for the time being, Lee said.
The company expects improving market demand to drive DRAM prices higher this quarter, as China’s stimulus packages are spurring sales of consumer electronics, Lee said.
DRAM prices last quarter dropped by a low single-digit percentage sequentially, he said.
On top of that, robust demand for high-bandwidth memory and high-density DDR5 DRAM chips are helping cut standard DRAM chip supply from the world’s major memorychip manufacturers and supply chain inventory, he said.
The anticipated DRAM price upticks are expected to help support the company’s gross margin to return to the positive territory this quarter, from minus-15 percent last quarter, Lee said, adding that the price increases would have been higher without the disturbance of US tariffs.
The company attributed the lackluster gross margin last quarter to the production transition from 20-nanometer technology to its second generation of 10-nanometer-class technology, which resulted in a lower yield rate.
The technology upgrade is necessary, as it allows the company to produce high-density and high-speed DDR5 DRAM chips used in cloud-based servers and edge devices beyond standard DRAM chips, the company said.
With the yield rate improving, the adverse effect would fade at the end of this quarter, it said.
Nonetheless, it would take time to see the company’s bottom line return to the black, although the situation would improve quarter by quarter this year, Lee said.
Nanya Technology yesterday reported that losses last quarter widened to NT$1.94 billion (US$59 million), compared with NT$1.57 billion the previous quarter. That marked a 10th consecutive quarter of losses.
The company plans to spend NT$19.6 billion in capital expenditure this year, up 21.7 percent from NT$16.1 billion last year.
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