DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported its first quarterly profit in about three years as chip prices soared 40 percent sequentially amid thriving demand for artificial intelligence (AI) applications and scarce supply of mature chips for non-AI devices.
The company posted net profit of NT$1.56 billion (US$50.82 million) last quarter, from losses of NT$4.1 billion in the previous quarter and NT$1.49 billion in the third quarter last year, with earnings per share of NT$0.5.
Gross margin improved to 18.5 percent, compared with minus-20.6 percent in the second quarter and 3.2 percent a year earlier.
Photo: Grace Hung, Taipei Times
Shipments expanded more than 20 percent and revenue soared 78.4 percent from the previous quarter, the company said.
The significant improvement boosted the company’s confidence about business prospects for this quarter and next year. It yesterday raised its shipment growth forecast this year to 50 percent annually from a previous estimate of 40 percent.
“We are positive about the fourth-quarter outlook. We have high confidence that it will be a better period than the third quarter. Gross margin and profitability would continue to improve,” Nanya Technology president Lee Pei-ing (李培瑛) told an online earnings conference. “Next year will be a quite good year.”
Lee attributed the positive outlook to an anticipated increase in demand for DRAM chips next year, thanks to wider adoption of AI in servers, PCs, smartphones and robots.
This quarter, average selling prices of the company’s products are to climb from last quarter, he said.
The price rebound follows a three-year downward spiral for DRAM chips used in PCs, smartphones and consumer electronics, he said.
Almost every memory chipmaker was affected over the past three year as the emergence of OpenAI’s generative AI models and Nvidia Corp’s AI servers stimulated demand for high-bandwidth memory (HBM) chips, which made up just 9 percent of total memory shipments, he said.
Nanya Technology attributed a drastic price rebound last quarter to a supply crunch of less advanced DDR4 and low-power DDR4 chips as the world’s major memory makers allocated more capacity to produce lucrative HBM or DDR5 DRAM chips to meet booming demand.
It would take time, effort and costs to reallocate those capacities back to making DDR4 and low-power DDR4 chips, it said.
“The supply gap remains quite significant,” Lee said. “We are unable to fully catch up to customers’ demand. We are doing our best to increase production and to satisfy customer’s demand.”
DDR4 and low-power DDR4 chips made up more than half of Nanya Technology’s total shipments last quarter, DDR5 chips accounted for 10 percent, and the remainder was DDR3 and others, the company said.
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