Macronix International Co (旺宏) yesterday said it would raise prices further in the upcoming quarters to reflect a severe chip crunch, following its first steep price hike last quarter that helped the company emerge from years of losses.
Macronix, a major supplier of NOR and NAND flash memory chips, is a major beneficiary of Samsung Electronics Co’s exit from the embedded multimedia card (eMMC) NAND flash memory market.
The Taiwanese firm has become almost the sole supplier of low-density multilevel cell NAND flash memory, which is used in eMMC, a managed memory unit integrating NAND and a controller.
Photo courtesy of Macronix International Co
That market is valued at between US$1 billion and US$2 billion, Macronix said.
“The gap between supply and demand of eMMC and NAND is huge,” Macronix chairman Miin Wu (吳敏求) told an earnings conference. “We will continue hiking prices in line with market dynamics.”
All supply agreements are based on monthly negotiations, rather than quarterly discussions, Macronix said.
The company has budgeted NT$22 billion (US$699.15 million) for capital expenditures this year as its 12-inch fab is almost at full capacity, it said.
The company plans to expand NAND flash memory capacity, but a majority of new manufacturing equipment would not arrive until the first half of next year due to the long lead time, it added.
The price increases last quarter prompted a jump in the chipmaker’s gross margin to 40.8 percent, the strongest in about four years, compared with 24.2 percent in the previous quarter and 17.7 percent a year earlier, Macronix said.
The improvement “marked a positive beginning of the year,” Wu said.
“I believe this year will be an interesting year. From my point of view, each quarter will be better than the previous quarter,” he added.
The company expects gross margin improvement to continue throughout this year, it said.
Last quarter was the company’s first profitable quarter since the second quarter of 2023, with a net profit of NT$1.78 billion, Macronix said.
It reported net losses of NT$294 million in the previous quarter last year and NT$873 million a year earlier.
Earnings per share improved to NT$0.9, versus losses per share of NT$0.16 a quarter earlier and NT$0.47 a year ago.
Revenue last quarter surged 71 percent year-on-year, or 35 percent sequentially, to NT$10.5 billion, the second-highest in the company’s history.
NAND flash memory posted the fastest growth to account for 30 percent of the company’s revenue last quarter, up from 21 percent in the previous quarter and 11 percent a year earlier.
NOR flash and ROM memory made up 58 percent and 8 percent respectively, it said.
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