Nanya sees tight DRAM supply

The global supply of DRAM chips including those for PCs, servers, TVs and industrial computers is expected to fall short of demand by 5.5% in the fourth quarter of 2013, Pei-Ying Lee, senior VP of Nanya Technology, said during an April 23 investors conference.

The DRAM market is expected to remain tight through the end of 2013, said Lee, adding that contract prices for the memory are set to continue rising at a moderate pace.

Nanya has diversified its offerings to include specialty DRAM targeted at consumer electronics products, as well as mobile DRAM for smartphones and tablets, Lee indicated. Nanya has put increased focus on its non-PC use products, and expects to grow revenues generated from the segment, Lee added.

Lee continued that the focus of Nanya's LPDDR2 product line, for example, is the fast-growing mobile device market in China. The company has expanded its customer portfolio in China, which now accounts for more than 40% of its total revenues, Lee said.

Nanya is among the DRAM manufacturers looking to diversify their product lines into non-PC areas in order to mitigate the negative impact of declining PC sales.

Nanya expects sales of its non-PC DRAM products, which include specialty DRAM and mobile DRAM chips, to account for more than 70% of company revenues by the end of 2013, according to Lee. The sales ratio already topped 60% in the first quarter.

Nanya swung to net profits of NT$506 million (US$17 million) in the first quarter of 2013, from net losses of NT$8.88 billion in the prior quarter and losses of NT$10.35 billion a year ago. "Positive results of the first quarter of 2013 are mainly attributed to corporate restructuring, product portfolio strengthening, ASP increase, and the gain from recovery of inventory valuation," Nanya said in a statement.

Along with profit improvement, Nanya's consolidated sales increased 22.3% sequentially to NT$9.25 billion in the first quarter of 2013. The company credited the revenue growth to a 30.5% rise in product ASPs. Operating income also returned to the black in the first quarter.

Looking forward, Lee pointed out that Nanya has developed 30nm 4Gb LPDDR2 chips and gained qualification from its customers, with volume shipments scheduled for the second quarter. Nanya will step up efforts to compete in the handset and smartphone, tablet, and e-book fields with its complete mobile DRAM products during the second half of 2013, Lee said.

In addition, Nanya is accelerating its conversion to 30nm process technology, which will help the company bring down its manufacturing costs, Lee noted. Chips built using the newer node will account for 20% of Nanya's total wafer capacity in the second quarter, and the proportion is set to climb further and reach 50% in the third quarter, according to Lee.