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Nanya expects DRAM price to go up in Q3

TAIPEI -- Nanya Technology Corp. (南亞科), one of Taiwan's leading DRAM suppliers, said Friday that with the industry set to enter its peak season in the third quarter, the company expects DRAM prices to rise 2 percent from the previous quarter.

On the sidelines of Nanya's annual general meeting, Lee Pei-ing, senior vice president of Nanya, said that with demand for mobile devices expected to remain strong and the server market's growth on track, the company is upbeat about the DRAM price movement for the July-September period.

In addition, prices of DRAM for PC use have shown signs of a rebound, which could give another boost to product prices in the upcoming quarter, Lee said.

Last year, Nanya turned a profit after posting NT$8.11 billion (US$270 million) in net profit, or NT$0.34 in earnings per share (EPS) at a time when the global DRAM industry hit a turning point due to efforts by several major suppliers to rein in supply, which helped to boost product prices.

In the first quarter of this year, Nanya posted NT$6.12 billion in net profit, up from NT$3.96 billion in the fourth quarter. The first-quarter net profit hit the highest level recorded by the company in 29 quarters.

In the January-March period, DRAM chips made on the 30-nanometer process accounted for 70 percent of its total sales. The company is scheduled to launch production of memory chips made on the more advanced 20nm process in the second half of 2016.

In the meeting, a proposal to cut Nanya's paid-in capital by 90 percent was approved. Lee said the capital reduction plan remains pending approval from the financial authorities, but he expressed hope that the capital cut plan will be realized by the end of June.

The plan, which aims to improve Nanya's financial condition, is expected to cut the company's paid-in capital to NT$23.96 billion from the current NT$215.65 billion.

Lee said that after the capital reduction, Nanya's book value per share is expected to rise to more than NT$5 at the end of the second quarter from NT$0.67 recorded at the end of the first quarter.

Lee said that as Nanya is optimistic about the DRAM market outlook, such an uptrend is expected to continue to boost the company's book value with its bottom line strengthened further.

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