DRAM chipmaker Nanya Technology Corp yesterday said that its second-quarter net profit rose 56 percent sequentially, as higher prices and increased output drove gross margins to a historical high.

Net earnings soared to NT$11.3 billion (US$370.3 million) in the quarter ending June 30, compared with NT$7.23 billion in the first quarter, the company’s financial statement showed.

Earnings per share jumped to NT$3.68 last quarter from NT$2.39 in the previous quarter.

On an annual basis, net profit soared about 74 percent from NT$6.49 billion, or NT$2.36 a share, in the second quarter last year, the statement showed.

For the current quarter, Nanya Technology expects average selling prices to be flat as the world’s major DRAM chip manufacturers continue to keep a tight rein on capacity expansion to match market demand.

DRAM demand looks healthy in the second half of this year, buoyed by demand from flagship mobile phones featuring artificial intelligence and facial recognition, data centers requiring bigger data storage and 4K television sets, the chipmaker said.

“The [DRAM] market looks stable,” Nanya Technology president Lee Pei-ing said. “We hope that prices will be sustainable in the third quarter.”

A stable market would help the company maintain a record-high gross margin of 55 percent in the third quarter, Lee said.

Last quarter’s gross margin received a boost from a 5 percent rise in prices and 20 percent quarterly growth in shipments, he said.

Shipment growth should allow revenue, which hit an all-time high of NT$24.59 billion last quarter, to continue increasing and post a new record this quarter, Lee said.

As the company continues to upgrade its technology to 20 nanometers, it expects shipments to increase about 5 percent sequentially this quarter, adding that 20-nanometer chips accounted for 70 percent of its total chip sales last quarter.

The company expects overall shipments to increase 48 percent this year, outpacing the market’s 20 percent growth forecast.

For next year, it expects annual shipment growth to decelerate to about 15 percent.

The company plans to start shipping 8Gb DDR4 DRAM for servers before the end of the year — its first step into this rapidly growing market as it seeks to expand and diversify its product portfolio.

Nanya Technology plans to spend NT$23.9 billion on new equipment for 20-nanometer and 10-nanometer process technologies this year, down from last year’s NT$29.4 billion.

Addressing concerns over the US-China trade row, Lee said there should be no adverse impact on global supply and demand in the short term.

The patent lawsuits between Micron Technology Inc and United Microelectronics Corp are also unlikely to affect market stability, he added.

By: DocMemory
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