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Nanya bullish on DRAM prices

by TAIPEITIMES

Nanya Technology Corp (南亞科技) expects a further uptick in DRAM chip prices during the second half of this year, extending a three-quarters-long price uptrend, as the world’s major memorychip suppliers are being disciplined about capacity expansion.

“Based on information from the world’s top three suppliers, they have been conservative about capital spending over the past two years. The growth in [DRAM] supply this year mainly derives from technology upgrades, meaning the output increase will be very disciplined,” Nanya Technology chairman Wu Chia-chau (吳嘉昭) said yesterday during opening remarks at the company’s annual shareholders’ meeting in Taoyuan’s Nankan District (南崁).

“Overall, supply and demand should reach a balance this year based on the analysis of some research houses,” Wu said.

Compared with stable supply growth, DRAM demand is rising rapidly as work-from-home, online learning and the stay-at-home economy boost demand for notebook computers, tablets, solid state drives and networking devices, he said.

In addition, DRAM demand is being propelled by 5G infrastructure, 5G handsets, artificial intelligence and other emerging technologies, as those devices are equipped with much bigger memory, he added.

As a result, Nanya Technology expects the DRAM industry is moving toward healthy development in the third and fourth quarters of this year.

“It looks more certain that DRAM market prices will have some upside,” Wu said.

Nanya Technology last month said that it was not sure whether the price increases would be sustained in the final quarter of this year.

There was a likelihood prices might be flat compared with this quarter, it said.

The global DRAM market grows at an annual rate of 15 to 20 percent on average each year and most suppliers target matching that pace in their capacity expansion, Nanya Technology said.

To fuel growth, Nanya Technology is developing 10-nanometer technologies, with its second-generation 10-nanometer chips scheduled to start small-volume production soon, Wu said.

The company also plans to start building a new 12-inch fab in New Taipei City’s Taishan District (泰山) at the end of this year at the earliest, he said, adding that construction would likely be completed by the end of 2023.

The company plans to invest NT$300 billion (US$10.78 billion) to make 10-nanometer chips over the next few years.

At its existing fabs, Nanya Technology is optimizing its 20-nanometer product lineups to address rising demand for chips for servers, PCs, portable devices and automotive applications, Wu said.

Shareholders yesterday approved a proposal to distribute a cash dividend of NT$1.3 per common share.

That represents a payout ratio of 52 percent based on the company’s earnings per share of NT$2.5 last year, or NT$7.67 billion net profit.

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