Two DRAM Makers in Taiwan See Q3 Loss Down 40%

Taipei, Oct. 27, 2009 (CENS)--Rising DRAM prices has helped chipmakers Nanya Technology Inc. and Inotera Memories Inc., both members of the Formosa Plastics Group (FPG), bring down losses by nearly 40% in the last quarter relative to that posted in the previous quarter.

Nanya saw its net loss shrink to NT$3.8 billion (US$117 million at US$1:N$33) last quarter from NT$6.5 billion (US$198 million) in the previous quarter, with that for Inotera down to NT$2.5 billion (US$76 million) from NT$4.1 billion (US$124 million).

Encouraged by the lower losses, Inotera President Charles Kao said: "the corporate operations look quite good overall," while Nanya's spokesman, P.L. Pai, said that his company will raise the prices of its DDR2 DRAM chips by around 20% this quarter.

Kao noted that Inotera saw net cash inflow of NT$5.2 billion (US$157 million) in the last quarter alone due to the market recovery.

Also buoyed by the recent rising prices, Pai said explosive growth in the market will inevitably happen after a long recession, similar to the strong DRAM revival in 1995 after a substantial slump, expecting demand at Nanya's customers to soar 40-50% throughout next year.

Pai noted that Nanya has been continually raising prices by 20% or so monthly since August to tap extremely low inventories at retailers, also saying that DRAM supplies worldwide are being depleted due to big capital expenditure cutbacks by major DRAM chipmakers over the past three years.

Q3 Results and Annual Capital Expenditure Plans by Nanya and Inotera

	Nanya	Inotera
Q3 Revenue (Quarterly Change)	NT$11.5B (42%)	NT$9.5B (28%)
Q3 Gross Profit Margin (Quarterly Change)	-13% (-47%)	-19% (-48%)
Q3 Net Loss (Quarterly Change)	NT$3.8B (-41%)	NT$2.5B (-39.1%)
Q3 Net Loss Per Share	NT$1.51	NT$0.73
Capital Expenditure Plan	Around NT$13B For 2009 and around NT$19B For 2010	Around NT$12.7-13.7B for 2009 and around NT$45B for 2010
Market Projection	Excessive Demand	Quite Good Operation

Sources: Nanya and Inotera