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Nanya, Inotera shares down on projected falling DRAM prices

Nanya, Inotera shares down on projected falling DRAM prices

Taipei, Oct. 13 (CAN) Shares of Nanya Technology Corp. (???) and Inotera Memories Inc. (???), two of Taiwan's major dynamic random access memory (DRAM) chip makers, fell Tuesday morning amid concerns that DRAM prices will trend lower in the fourth quarter, dealers said. The concerns mounted after Nanya's cautious market assessment at an investor conference held Monday, when the DRAM vendor reported a more than 10 percent sequential increase in net profit for the third quarter, they said. As of 11:13 a.m., shares of Nanya had fallen 1.38 percent to NT$39.45 (US$1.21), and shares of Inotera were down 1.64 percent at NT$24.00 on the local main board. The weighted index on the Taiwan Stock Exchange was down 0.54 percent at 8,527.17. "Nanya's investor conference dampened investor sentiment. It was no surprise that selling in these two major DRAM stocks emerged soon after the local equity market opened today," Ta Ching Securities Investment Consulting analyst Eric Lai said. Nanya and Inotera are the two DRAM manufacturing arms of conglomerate of Formosa Plastics Group (????). At the investor conference, Nanya said prices of commodity DRAMs used in PCs have fallen since the beginning of the fourth quarter, and it expected prices in the global DRAM market to keep falling in the current quarter from the third quarter. Nanya suffered an 11.2 percent quarter-on-quarter fall in its average selling price in the third quarter to push down its gross margin to 37.3 percent, down 4.7 percentage points from the second quarter. Its third quarter operating margin also fell 6.4 percentage points from a quarter earlier to 28.6 percent. During the July-September period, Nanya's operating profit fell 24.5 percent from a quarter earlier to NT$2.95 billion, reflecting weakening product prices. Net profit was up 10.8 percent from a quarter earlier to NT$4.72 billion, with earnings per share of NT$1.94. "The increase in net profit came from its non-core business operations, including the weakness of the Taiwan dollar," Lai said. "Nanya was just one of many Taiwanese exporters to benefit from a depreciating Taiwan dollar, but its core DRAM business remained under pressure." Nanya said it booked NT$1.394 billion in net profit in the third quarter from its investment in Inotera, in which it owns a 24 percent stake. Inotera has not released its own third quarter results yet. But, based on the net profit booked by Nanya, Inotera is expected to report a net profit of about NT$5.81 billion for the third quarter, up some 26.6 percent from a quarter earlier. In the first nine months of this year, Nanya posted NT$15.26 billion in net profit, with EPS of NT$6.3. Nanya said that with the advanced 30 nanometer process expected to carry more weight in its product portfolio in the fourth quarter, its operating costs should fall and help its gross margin stabilize. (By Jackson Chang and Frances Huang)


Updated : 2021-09-17 16:09 GMT+08:00