Nanya Tech profit jumps on price gain

From : Taipei Times



DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said that its net profit surged 77 percent last quarter, as rising prices lifted its gross margin to a seven-quarter high.

Net profit rose to NT$3.28 billion (US$108.8 million) during the quarter ending March 31, compared with NT$1.85 billion a year ago. Earnings per share rose to NT$1.19 from NT$0.68 during the same period.
Gross margin climbed to 40.1 percent last quarter, compared with 32.7 percent in the previous year, thanks to a 25 percent price hike on an annual basis, the company’s financial statement showed.

“We would have reported even better profits if not for the impact of a volatile currency exchange rate,” Nanya Technology president Lee Pei-ing (李培瑛) told reporters.

The Taoyuan-based memorychip maker booked a foreign-exchange loss of NT$575 million in the first quarter, reversing a foreign-exchange gain of NT$480 million in the final quarter of last year.
Lee gave an upbeat outlook for the current quarter amid expectations that DRAM chip prices would continue rising for at least two quarters.
DRAM chip prices are forecast to increase by 10 percent this quarter, bolstered by growing demand for consumer electronics, such as ultra-high-definition 4K TVs and set-top boxes, as well as corporate PCs and servers.

A healthy supply and demand balance also underlies his optimism.
“Supply is still about 1 percent short of demand,” Lee said. “Most supply increases are coming from technology upgrade, which means very limited growth.”

As prices continue to climb, Lee expects “the second quarter will be a better period than the first [quarter] in terms of profitability.”
Nanya Technology also expects shipments to be back on track this quarter after it has fully adjusted equipment for the migration to 20-nanometer (nm) process technology from 30nm.
The chipmaker expects to begin shipping a small volume of 20nm chips next quarter.

As demand in the second half is usually stronger than the first half, Lee said he is optimistic about the third quarter.
For one, smartphone makers will need higher density memorychips for their new mid-to-high-end models that come with dual-lens cameras, he said.

Risks to growth could emerge in the fourth quarter, assuming the world’s major memory chipmakers, such as Samsung Electronics and SK Hynix, decide to reallocate capacities to DRAM chips once supply of 3D NAND flash memorychips outpaces demand, Lee said.
Nanya Technology has set a higher capital expenditure of NT$34.3 billion for this year, compared with NT$22.3 billion last year, most of which is to be used for its technology migration.