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Nanya, Inotera shares up as Micron jumps, but gains capped

Nanya, Inotera shares up as Micron jumps, but gains capped

Taipei, Jan. 9 (CNA) Shares of Nanya Technology Corp. and Inotera Memories Inc., two of Taiwan's leading dynamic random access memory (DRAM) chip makers, moved higher Friday morning after their U.S.-based counterpart Micron Technology Inc. soared on Wall Street overnight, dealers said. However, Nanya and Inotera's gains were limited amid concerns over the first quarter's usual slow season, which prevented investors from chasing prices, dealers said. As of 11:01 a.m., shares of Nanya had risen 0.49 percent to NT$82.20 (US$2.56), off an early high of NT$83.90, while shares of Inotera had climbed 1.61 percent to NT$50.40, off an early high of NT$51.00. The stocks were outperforming the broader market. The weighted index on the Taiwan Stock Exchange was down 0.12 percent at 9,227.34 points. "Given their close business ties with Micron, Nanya and Inotera tend to move in tandem with the U.S. chip maker," Ta Ching Securities analyst Andy Hsu said, referring to an almost 5 percent jump in Micron shares overnight. Inotera is a joint venture between Nanya and Micron. The the two local firms are the DRAM manufacturing arms of the conglomerate Formosa Plastics Group. Hsu said that although Micron gave a lower-than-expected forecast for the first quarter, many tech analysts remain upbeat about its earnings outlook, given the solid global demand for mobile devices. Among the upbeat analysts, Ruben Roy of Piper Jaffray maintained his overweight rating on Micron shares, and Srini Sundararajan, an analyst at Summit Research Partners, kept his a buy rating on the stock. Micron, however, has forecast that its first-quarter sales will range between US$4.1 billion and US$4.3 billion, lower than a previous market estimate of US$4.532 billion. Hsu said Micron is among the top three DRAM suppliers in the world, competing with South Korea's Samsung Electronics Co. and SK Hynix Inc. "As long as Micron has good prospects, Nanya and Inotera will benefit," Hsu said. In the first nine months of 2014, Nanya posted NT$8.63 in earnings per share, compared with NT$1.98 in the same period of the previous year, while Inotera posted NT$5.31, compared with NT$1.78 in the same period of 2013. Dealers attributed the improving profitability of the two companies to a recovery in the global DRAM market and forecast that Nanya's 2014 EPS will reach NT$11 this year and Inotera's NT$7.1. "But, the current slow season effects in the first quarter have limited Nanya and Inotera shares and are likely to continue to do so in the near term," Hsu said. He said Nanya shares could see stiff technical resistance at around NT$89.30, and Inotera shares are expected to face high technical hurdles at around NT$53.30. In addition, Hsu said, the market is worried that Samsung will put more effort into its semiconductor operations in a bid to offset the slower sales in its smartphone division. "Once Samsung expands its DRAM output, a new competition war could begin, and the competitors could feel the pinch of falling product prices," Hsu said. (By Frances Huang)


Updated : 2021-09-23 06:04 GMT+08:00