Bloomberg News

Nanya, Inotera Losses Widen on Waning Demand for Computer Memory

July 19, 2011

July 19 (Bloomberg) -- Nanya Technology Corp., Taiwan’s second-largest memory-chip maker, posted a sixth consecutive quarter of losses on slowing demand for computers.

Second-quarter loss widened to NT$7.9 billion ($273 million) from an NT$1.1 billion loss a year earlier, the Taoyuan, Taiwan-based company said in a statement today. The average of seven analysts’ estimates compiled by Bloomberg was for a NT$5.3 billion loss. Inotera Memories Inc., Nanya’s Taoyuan-based venture with Micron Technology Inc., had an NT$3.9 billion loss, also worse than estimates.

Global computer shipments climbed 2.3 percent in the second quarter, less than an expected 6.7 percent, researcher Gartner Inc. said July 13. A 10 percent increase in the quarter for prices of dynamic random-access memory, the most common chip in computers, wasn’t enough to return the companies to profitability.

Nanya shares fell 0.7 percent to NT$7.11 at the 1:30 p.m. close of trade today in Taipei before the announcement, extending its decline this year to 56 percent. Inotera Memories fell 1.9 percent to NT$7.59.

Nanya’s second-quarter revenue dropped 27 percent from a year earlier to NT$11.5 billion, while Inotera’s fell 10 percent from a year earlier to NT$10.1 billion. Inotera’s loss is its sixth in row on a quarterly basis.

Inotera’s shipments, measured in bits, will climb 25 percent this quarter from the previous three months, while capital expenditure for the year will remain at NT$17 billion, according to a company statement.

Shipment Growth

Nanya’s shipments climbed 2 percent from the prior quarter, the company said in a statement today. Average prices climbed 10 percent from the prior quarter while an appreciation of the Taiwan dollar cut revenue by 4 percent, it said.

Shipments will climb 10 percent to 20 percent this quarter from the second quarter, it said. The company will keep its capital expenditure for the year at NT$12 billion. Shipments of DRAMs used in consumer-electronics products will double in the second half of the year from the first six months.

Memory chips used in servers, high-end computers that transfer information and store data, can sell for more than double the price of those in personal computers, Nanya vice president and spokesman Pai Pei-lin said today.

Server memory accounted for 15 percent to 20 percent of revenue in the second quarter, and will be more than 20 percent this quarter, Pai said. Memory chips used in consumer electronics devices was around 20 percent of sales in the quarter, and may climb to 25 percent this period, he said.     Chip prices may fall, forcing manufacturers to cut production, Trendforce Corp.’s DRAMeXchange research unit said in a July 13 statement.

--Editors: Anand Krishnamoorthy, Dave McCombs

To contact the reporter on this story: Tim Culpan in Taipei at

To contact the editor responsible for this story: Young-Sam Cho at

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