DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted its highest quarterly net profit in about two-and-a-half years as strong demand and an improved product lineup boosted prices by 30 percent.
Net profit swelled to NT$6.16 billion (US$219.33 million) in the three-month period to last month from NT$2.7 billion in the first quarter, the highest since the fourth quarter of 2018.
On an annual basis, net profit soared 91.3 percent from NT$3.22 billion.
Earnings per share rose to NT$2 from NT$0.88 a quarter earlier and NT$1.05 in the second quarter last year.
The growth momentum gave Nanya Technology an optimistic view of the second half of this year.
“There is a good chance to see a further price upticks in the third quarter,” Nanya Technology president Lee Pei-ing (李培瑛) told a media briefing, although he added that the price increases might be less drastic than last quarter.
Last quarter’s price hikes were driven by strong demand for less-advanced DDR3 DRAM chips due to short supply, Lee said.
DDR3 made up about half of Nanya Technology’s overall shipments last quarter, higher than the 30 to 40 percent it estimated in April.
This quarter, price hikes for DDR4 chips are expected to catch up to DDR3, he said.
Gross margin is likely to surpass last quarter’s 42.3 percent, Lee said.
Last quarter’s gross margin was the highest in 11 quarters, up from 29.1 percent in the first quarter and 30.6 percent from the second quarter last year.
Shipments this quarter might be flat or slide slightly from last quarter, as Nanya Technology is utilizing all of its capacity, Lee said.
The memorychip maker’s forecast is based on expected improvements in the global economy as the COVID-19 pandemic eases.
Nanya Technology expects DRAM demand to keep pace with global economic growth, Lee said.
Demand for servers, computers for enterprises, consumer electronics such as TVs, wearable devices and high-end smartphones all look resilient in the third and fourth quarters, he said.
Forty percent of smartphone sales are expected to be 5G devices, he said, adding that sales of entry-level smartphones in developing countries have shown weakness amid the pandemic.
Uneven component supply constraints could crimp server and computer shipments in the second half of this year, Lee said.
The pandemic situation is precarious and might affect demand, he added.
The chipmaker would closely monitor capital spending to expand capacity at major memorychip makers, he said.
The DRAM industry looks stable this year, as inventory at the world’s major suppliers is sliding to a relatively low level, Lee added.
Nanya Technology plans to spend NT$15.6 billion on new facilities and equipment this year, mostly to develop new-generation DRAM chips.
The development of new 10-nanometer memory chips is on schedule, the company said.
In April, it unveiled a NT$300 billion investment in a new 12-inch fab in New Taipei City.
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