Nanya, Inotera Post Eighth Quarter of Losses as DRAM Chip Prices Decline

Author: Spencer Ogden
Date posted18/Jan/2012
Author: Spencer Ogden

Nanya Technology Corp. (2408) and Inotera Memories Inc. (3474), Taiwan’s second- and third-largest memory-chip makers, posted their eighth quarter of losses as slowing demand for personal computers pushed down prices.

Net loss widened 8 percent to NT$10.99 billion in the fourth quarter, from NT$10.15 billion a year earlier, Nanya said in a statement today. Inotera’s loss increased 29 percent to NT$6.02 billion, it said in a statement.

Shipments of computers that use the chips Nanya and Inotera make may have fallen short of expectations in the fourth quarter as floods in Thailand disrupted supplies of disk drives used in to make them, Microsoft Corp. said Jan. 10. Prices of dynamic random-access memory, or DRAM, the most common chip used in computers, fell by an average of 12 percent during the quarter from the prior three-month period, Nanya Vice President Pai Pei- Lin told reporters in Taipei today.

“The current situation makes consolidation inevitable for the industry,” said Charles Kau, president of Inotera, a venture between Nanya and Boise, Idaho-based Micron Technology Inc. (MU)

Nanya’s fourth quarter loss was wider than the NT$9.7 billion average of seven analyst estimates compiled by Bloomberg, while Inotera’s NT$6.03 billion deficit beat the NT$6.6 billion loss based on the average of nine analyst estimates. Both companies last posted profits in the fourth quarter of 2009.

Shipments of DRAM, measured in bits, climbed 7 percent at Nanya during the period from the prior three months, Pai said. Deliveries will probably be flat in the first quarter compared with the three months ended Dec. 31, Pai said.

Inotera’s board approved plans on Dec. 13 to sell as many as 1.5 billion new shares to Nanya and Numonyx Inc., a unit of Micron, as well as take out a $133 million short-term loan from Numonyx.

Nanya fell 6.6 percent to NT$2.12 at the 2:30 p.m. close of trading in Taipei. The shares plunged 86 percent last year, the second-worst performance in the FTSE Asia-Pacific Index after Tokyo Electric Power Co., operator of a nuclear power plant crippled by an earthquake and tsunami in March. Nanya dropped 50 percent in 2010.

Inotera jumped 5.8 percent today, the biggest advance in three weeks, to NT$5.33.

Elpida Memory Inc. (6665), a Japanese DRAM maker reorganizing with government support, seeking a capital alliance with Micron, the Yomiuri newspaper reported today.

The Tokyo-based chipmaker told lenders it intends to boost its share in the market for the chips jointly with Micron, the Yomiuri reported, without saying where it got the information.