DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday posted its first quarter-on-quarter loss in more than nine years as consumers, particularly in China, were hesitant to spend on nonessential items such as PCs and mobile phones due to the global economy facing strong headwinds.
The company posted net losses of NT$1.15 billion (US$37.75 million) in the final quarter of last year compared with a net profit of NT$2.64 billion in the third quarter and NT$6.45 billion a year earlier.
Nanya Technology blamed poor demand for a steep 25 percent quarter-on-quarter, or 52 percent annual, drop in prices.
Photo: Lisa Wang, Taipei Times
As a result, Nanya Technology ended the year with net profits slumping 36.04 percent to NT$14.61 billion from NT$22.85 billion a year earlier. That translated into earnings per share of NT$4.72, down from NT$7.2 in 2021.
Revenue declined 33.5 percent last year to NT$56.95 billion from NT$85.6 billion in 2021.
“Market demand has been in the doldrums. Nanya Technology’s fourth-quarter earnings have fallen short of our expectations due to weak market conditions,” company president Lee Peing-ing (李培瑛) told an online media briefing yesterday.
To cope with sluggish customer demand, the New Taipei City-based chipmaker has implemented a short-term mechanism to flexibly adjust its factory utilization, Lee said.
On top of that, Nanya Technology is scaling back capital spending for this year to about NT$18.5 billion from NT$20.7 billion last year. The the biggest reduction would be seen in manufacturing equipment outlays.
The company cut 27 percent of its capital spending last year.
Shipments would drop by about 20 percent annually this year, the chipmaker said.
Looking forward, Nanya Technology expects its losses to increase this quarter, as almost all DRAM suppliers have excess inventory, while market demand remains muted, Lee said.
The average selling price for DRAM would decline further this quarter, but the drop would be milder than the sequential drop of 20 percent recorded over each of the past two quarters, Lee said.
“Market conditions are already very weak. There is a slim chance of further deterioration,” Lee said. “Demand has hit bottom in China. Any rebounds would depend on China’s economic stimulus measures and [COVID-19] policy. China plays a crucial role [in kick-starting any recovery].”
There is a chance that the industry will recover in the second half of this year, but only if there are improvements in China’s COVID-19 situation, the supply chain, global inflation or Russia’s war in Ukraine, the company said.
Nanya Technology said it has stopped filling staff vacancies due to the severe industry downturn.
It does not have any plans to build a new factory outside of Taiwan, although some customers have voiced concern about supply risks amid rising geopolitical tensions, Lee said.
Nanya Technology is building a new 12-inch fab in New Taipei City to make next-generation 10-nanometer memory chips. The factory is expected to start operations in 2025.
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