Macronix International Co (旺宏) yesterday reported its first quarterly loss in about six-and-a-half years due to rising inventory valuation losses.
The memorychip maker posted net losses of NT$355 million (US$11.57 million) in the first quarter of the year, reversing profits of NT$605 million in the prior quarter and NT$2.93 billion a year earlier.
Gross margin dropped to 25.1 percent last quarter from 34.1 percent in the previous quarter and 48.3 percent a year earlier, Macronix said.
Photo: Ritchie B. Tongo, EPA-EFE
That came as its inventory valuation losses swelled to NT$922 million in the first quarter amid sluggish customer demand for memory chips used in consumer electronics and PCs.
In the previous quarter, Macronix registered NT$700 million in inventory valuation losses.
The world’s largest NOR flash memory chipmaker said it expects to book similar losses this quarter, given lackluster demand for the chips amid a weak global economy.
NOR flash memory chips accounted for 53 percent of the company’s revenue last quarter.
First-quarter revenue contracted 22 percent sequentially and 39 percent year-on-year to NT$7.1 billion, it said.
“I believe revenue in the second quarter will be comparable to the first quarter based on the company’s historical record,” Macronix chairman Miin Wu (吳敏求) told investors. “But, we hope we can start making money again in the second quarter.”
WORST OVER?
The company has weathered the worst, so it would keep its stable pricing strategy this quarter, Wu said.
Growing demand for NOR flash chips used in vehicles, medical and industrial devices would help Macronix return to the black this quarter, he said.
NOR flash chips for automotive, medical and industrial devices accounted for 47 percent of Macronix’s revenue in the first quarter.
The company counts Nvidia Corp, Qualcomm Inc, NXP Semiconductors NV and Renesas Electronics Corp among its automotive chip customers.
Macronix does not expect a major uptick in demand for electronic devices this year, as people tend to save money for emergencies under unfavorable macroeconomic conditions rather than splashing on non-essential items, Wu said.
Despite receiving some rush orders, the company does not expect a full recovery any time soon, he said.
The company’s ROM chip business would be one of the bright spots, as the growth momentum is likely to extend into this quarter from last quarter, Wu said.
Nintendo Co is a major ROM chip client for Macronix.
Factory utilization this quarter would be similar to that in the fourth quarter of last year, the company said.
MICRON PROBE
Commenting on the impact of China’s cybersecurity probe into Micron Technology Inc, Wu said that would not affect Macronix as the investigation is about the US company’s DRAM business.
Macronix plans to spend NT$10 billion on new equipment this year mostly for its new 12-inch fab, same with last year.
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