Macronix International Co (旺宏), the world’s biggest supplier of NOR flash memory chips, yesterday reported a fifth consecutive quarterly loss for last quarter due to a weaker-than-expected pickup in customer demand.
Last quarter’s losses widened slightly to NT$296 million (US$9.22 million) from NT$286 million the previous quarter. On an annual basis, losses improved from NT$408 million.
“The third-quarter top line should have been better theoretically. It did not live up to our expectations. That is why our operating profit margin remained in negative territory,” Macronix chairman Miin Wu (吳敏求) told an online investors’ conference.
Photo: CNA
Operating profit margin improved to minus-4.6 percent last quarter from minus-7.9 percent the previous quarter, the best performance in five quarters.
“We had expected to turn a profit in the third quarter, but the overall business environment did not improve significantly and revenue fell short of our expectations,” Wu said.
Revenue expanded 20 percent sequentially, or 6 percent annually, to NT$7.76 billion last quarter.
Revenue from ROM products, primarily used in Japan’s Nintendo Co game consoles, dipped 20 percent annually last quarter, Macronix said.
“The demand from this customer in the third quarter was the weakest compared with the past third quarters, creating heavier pressure on us,” Wu said.
About 29 percent of Maronix’s revenue last quarter came from ROM products, down from 38 percent a year earlier, the company said.
NOR and NAND flash memory chips made up 55 percent and 8 percent of the company’s revenue last quarter respectively, while the remaining 8 percent came from foundry services, it added.
Gross margin last quarter fell to 28.9 percent from 30 percent in the second quarter, due to losses stemming from excessive inventory and lower utilization at its 8-inch fab, Wu said.
The average selling price remained steady, he added.
“We will work on more aggressive approaches to reduce inventory,” he said, adding that lowering factory utilization would not be an option.
Macronix gave a dismal outlook for the current quarter, but said it is positive about next year as it digests inventory.
“We would have a chance to grow next year,” Wu said.
The company said its customers are gradually depleting their inventories and ROM demand from Nintendo is expected to grow significantly with the launch of a new game console.
However, the world economy is forecast to improve tepidly next year, indicating soft demand, it added.
The company said it plans to issue NT$3 billion of corporate bonds and would use the proceeds to repay bank loans.
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