Foreign exchange gains boost Nanya’s second quarter net income

DRAM chipmaker expects tough quarter ahead amid soaring inflation and questions over Chinese production resumption

  • By Lisa Wang / Staff Reporter

DRAM chipmaker Nanya Technology Corp (南亞科技) said yesterday that net profit rose 0.4% last quarter as foreign exchange gains helped cushion the effect of lower demand for electronics. general public amid high inflation and COVID-19 lockdown in China.

Net profit increased from NT$6.55 billion in the first quarter to NT$6.57 billion (US$220.3 million), or earnings per share of NT$2.12 from $2.11 NT in the previous quarter.

While operating profit last quarter contracted 14.3% to NT$5.36 billion, net profit increased mainly due to non-operating profit of NT$1.74 billion , more than half of which came from foreign exchange gains, the company said.

Photo: Grace Hung, Taipei Times

Nanya Technology expects a difficult quarter ahead amid rising inflation around the world and falling consumer confidence, as well as uncertainty over the resumption of production in China.

China’s “zero COVID” policy has severely affected consumer spending in the world’s largest economy and rippled through electronics supply chains, Nanya Technology said.

“The third quarter will be a difficult period. The third quarter is usually a peak season, but this year it is unclear whether there will be a seasonal effect,” Nanya Technology Chairman Lee Pei-ing (李培瑛) said yesterday during a briefing. online press.

“The request for [DRAM] declines in the short term,” Lee said.

Weak demand for DRAM chips for consumer electronics, mainly smartphones and laptops, would eventually spill over to memory chips used in servers, as people become conservative on most products due to macroeconomic uncertainties, a he declared.

Any recovery in demand for DRAM chips would depend on improving global inflation, the resumption of production in China and economic stimulus measures from governments around the world, Lee said.

The average selling price is expected to fall further this quarter after a sequential single-digit percentage decline last quarter due to the lingering impact of global inflation as Russia’s invasion of Ukraine led to a surge. crude oil and natural gas prices, Lee said.

Gross margin is also under increasing pressure and is expected to decline this quarter from 44.1% in the quarter ending June 30, due to higher raw material costs, manufacturing equipment and price increases. electricity by 15%, Lee said.

Foreign exchange gains boosted gross margin by 0.2 percentage points last quarter, from 43.9% in the first quarter, Lee said, but added that it was difficult to predict how the market would develop this quarter.

Major memory chip inventories rose last quarter and could continue to rise in the second half given an unfavorable external environment, he said.

Nanya Technology said it is sticking to its projected capital expenditure of NT$28.4 billion for this year, but delays in equipment delivery could reduce spending by around 10%.

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