After reporting record-high profits for the first quarter, Adata Technology Co (威剛科技), a supplier of DRAM and NAND flash memory modules, yesterday said it expects to again post a new high this quarter as the global memory industry is entering a long-term upcycle, driving chip prices higher.
Net profit in the first quarter surged 130.75 percent to NT$9.53 billion (US$302.4 million) from NT$4.13 billion in the previous quarter. On an annual basis, net profit spiked 1,711.79 percent from NT$526 million.
Earnings per share rose to NT$30.05, the highest in the company’s 25-year history, compared with NT$13.04 a quarter earlier and NT$1.72 a year ago.
Photo: CNA
Gross margin also climbed to a record high of 55.7 percent from 48.4 percent in the previous quarter and 13.7 percent a year earlier.
“The company started this year well with a strong financial performance in the first quarter. For the whole of this year, business would continue growing at full speed,” Adata chairman Simon Chen (陳立白) said in a statement.
A shortage of memory chips has triggered price hikes, Adata said, adding that it has seen no signs of an end to the trend.
The supply of DRAM chips became scarce as the world’s major memory producers stopped producing DDR4 and new-generation DDR5 chips, along with a tight supply of high-bandwidth memory chips used in artificial intelligence (AI) servers, Chen said.
“Entering the second quarter, we see demand being driven by the AI boom. The market is entering a new phase with supply shortage becoming a new norm,” he said.
Adata aims to boost its memory inventory to NT$50 billion in June from NT$40 billion this month on expectations that contract DRAM and NAND memory prices would rise by at least 40 percent this quarter.
The company said that it expects revenue and net profit to grow further this quarter.
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