Memorychip packager and tester Powertech Technology Inc yesterday gave a positive revenue growth outlook for this year after posting a net profit of NT$5.85 billion (US$200 million) for last year, the highest in seven years.

The figure represents annual growth of 21 percent from NT$4.84 billion in 2016, the company’s financial statement showed.

Earnings per share rose from NT$6.2 to NT$7.51.

Gross margin slid from 21.6 percent in 2016 to 21.3 percent last year, eroded by the New Taiwan dollar’s appreciation against the US dollar and lower margins at its new DRAM fab in Xian, China.

The fab made up 8 percent of Powertech’s revenue, which totaled NT$59.63 billion last year.

“We are excited about this year. We enjoyed decent [growth] last year. This year, we are aggressively building new capacities for a major client, which will ramp up a new fab in June or July,” Powertech chairman D.K. Tsai told an investors’ conference.

Tsai’s optimism also builds on increasing adoption of DRAM and NAND memory chips in more applications, including Internet of Things, artificial intelligence and cryptocurrency mining, this year.

Powertech tapped into the cryptocurrency business in September last year by offering chip packaging and testing services for two major cryptocurrency mining companies.

Almost all electronic devices are to be equipped with bigger storage space and higher-density memory chips to enhance computing performance and speed, Tsai said.

Addressing concerns over a potential supply glut in NAND flash memory chips, Tsai said that “we are optimistic about the memory industry this year.”

A significant growth in new NAND flash memory capacity from the world’s major makers at the end of this year would not be enough to quench strong demand, Tsai said, citing information collected from the supply chain.

Powertech, which counts Micron Technology Inc among its clients, plans to invest less than NT$15 billion on new facilities and equipment this year.

The investment would be used mostly to expand the capacity of its packaging and testing services for flash memory chips by 10 percent, the company said.

“We expect revenue to grow quarter by quarter this year, following the company’s business pattern over the past few years,” Powertech general manager Hung Chia-yu said.

“NAND flash memory chips will be an important growth driver,” he added.

Hung said he expects “to see some seasonal softness in mobile DRAM during the first quarter, but business would rebound in March.

“We expect a faster pickup this year,” Hung said, adding that Powertech has received significant rush orders.

Memory chips for TVs, set-top boxes and games consoles would help offset weakness in the mobile phone and PC segments, he said.

During the final quarter of last year, net profit expanded 10.5 percent annually to NT$1.66 billion from NT$1.44 billion.

Earnings per share rose from NT$1.84 to NT$2.12 during the period.

Net profit rose 2.1 percent from NT$1.62 billion last quarter.

By: DocMemory
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