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June 27, 2017

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Nanya, Inotera shares hit by overnight plunge

TAIPEI -- Shares of Taiwan-based dynamic random access memory chip (DRAM) makers Nanya Technology Corp. (南亞科) and Inotera Memories Inc. (華亞科) came under heavy pressure Tuesday in the wake of a plunge in U.S. counterpart Micron Technology Inc. overnight, dealers said.

The selling came after investors locked in the recent gains they had built in the two stocks in recent sessions on optimism over tight supply in the global DRAM market, they said.

Shares of Nanya fell 5.90 percent to close at NT$7.81 (US$0.26) with 9.85 million shares changing hands, while shares of Inotera shed 7 percent, the maximum daily decline, to end at NT$53.20 on trading volume of 106.90 million shares.

The weighted index on the Taiwan Stock Exchange closed down 0.3 percent, at 9,391.88 points.

Nanya and Inotera, a joint venture between Nanya and Micron, are the DRAM manufacturing arms of local conglomerate Formosa Plastics Group.

The two local DRAM stocks opened lower as investors here took cues from a 4.31 percent dive suffered by Micron shares in the U.S. market overnight to cut their holdings, and selling continued until the end of the session to send the two stocks into a tailspin, dealers said.

Micron shares had been hampered by technical factors after the stock rose about 30 percent in the past three months, they said.

Nanya and Inotera were scheduled to hold investor conferences after the market close Tuesday. The two companies have been widely expected to report improving results for the second quarter on solid demand for memory chips due to the rising popularity of mobile devices.

But that optimism failed to fend off profit-taking, sparked by a weaker Micron overnight, after the local bellwether electronics sector made a strong showing in recent sessions.

Nanya posted NT$11.92 billion in consolidated sales in the second quarter, up 1.9 percent from the first quarter, while Inotera registered NT$21.45 billion in consolidated sales, up 6.06 percent from a quarter earlier.

As the third quarter is a traditional peak season for the semiconductor industry, the market has expected that Nanya and Inotera will continue to report satisfactory results in the current quarter.

Before the investor conference, Nanya said due to strong demand for PCs, servers and smartphone phones, the average selling price of DRAM for the third quarter is likely to rise about 5 percent from the second quarter.

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