DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said net profits last quarter more than doubled to NT$7.23 billion (US$246 million) from a year earlier as price hikes helped raise its gross margin to a record high amid unresolved supply constraints.
On a quarterly basis, net profits tumbled 67 percent without the gain of NT$16.12 billion from sales of Micron Technology Inc shares in the fourth quarter of last year.
However, a strong NT dollar prevented the chipmaker’s bottom line from breaking a new record.
Maybank estimated that Nanya Technology would make profit totaling NT$7.9 billion last quarter.
Unfavorable foreign-exchange rates saw the company incur a loss of NT$1.18 billion last quarter.
The rate impact was a double whammy for the chipmaker, as most of its revenue is in US dollars and it owns US dollars equal to NT$40 billion.
“We have implemented measures to hedge [against foreign-exchange volatility]… We expect foreign-exchange effects to improve significantly this quarter,” Nanya Technology president Lee Pei-ing (李培瑛) told a media briefing.
Nanya Technology now has NT$20 billion in US dollars, after converting half of its cash funds into NT dollars, it said.
Given his outlook on the DRAM market, Lee said he maintains an upbeat tone.
As the world’s top three memory chip makers are keeping a tight rein on capacity expansion, Lee said he expects supply growth to continue lagging behind that of market demand, making room for further price hikes.
“The supply scarcity will be noticeable during the second quarter,” Lee said. “Average selling prices are likely to rise by a low-single digit percentage.”
That would help boost Nanya Technology’s gross margin to a new high this quarter and next quarter, Lee said.
Gross margin climbed to an all-time high of 51.3 percent last quarter, compared with 40.1 percent a year earlier and 49.7 percent in the third quarter of last year, the company’s financial statements showed.
Nanya Technology said it would crank out more cost-efficient 20-nanometer chips and more better-priced DDR4 chips to meet demand for bigger memory storage.
The chipmaker expects shipments this quarter to grow about 15 percent quarter-on-quarter. For the full year, shipments are expected to expand about 48 percent year-on-year, it said.
Servers are likely to be the biggest driver for DRAM consumption this year, thanks to emerging artificial intelligence applications and more cloud-enabled services, coupled with server replacement demand, Lee said.
On its migration to next-generation technology, Nanya Technology aims to produce a small amount of 10-nanometer memory chips in 2020, it said.
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