Slow PC demand sees Taiwan DRAM makers suffer losses

Two of Taiwan’s major DRAM players have reported losses in the first half of the year due to slowing demand for PCs.

At an investor conference, the island’s second largest chip manufacturer, Nanya, reported net losses of $574 million in the first half.

This was echoed by fellow Taiwanese DRAM maker Inotera, which also saw losses to the tune of $134 million.

Nanya’s second quarter revenue fell 27 percent year on year, meaning a revenue loss of $273 million. This was the sixth consecutive quarterly loss for Nanya.

Nanya did see its average selling price rise by 10 percent in the second quarter from the start of the year, however this was still a 57 percent drop from the same point last year.

Meanwhile shipments climbed two percent from the preceding quarter, and this is expected to increase between 10 to 20 percent in the next quarter.

Nanya pointed to a few factors for the poor results, including sluggish demand for PCs in mature markets – in part due to financial instability in certain economies.

However, the firm showed some signs of optimism.  For example, there are expectations that a migration to a smaller process will see better results. 

Business PC demand remained stable, while smartphone DRAM continued to grow, it said in a statement.

Spot prices were a concern going into the third quarter however, and Nanya has indicated recently that this could lead to a cut in production.

Inotera also saw its second quarter revenues take a hit, dropping 10 percent.

There was a six percent jump in quarterly sales revenue from the start of the year, which the firm attributed to higher selling price.

Inotera also signalled its intention to produce high-end products for the server and mobile DRAM markets.

Inotera looked towards the trials of a new 30 nanometre process, with pilot runs in the third quarter, followed by volume production at the start of 2012.

IHS iSuppli recently noted that a move to smaller lithography processes will help the DRAM market bounce back fully in the long run.

Meanwhile, an increase in its 42nm process chips is expected to see 25 percent boost in shipments, going into the second quarter.

According to CENS, PowerChip Semiconductor (PSC) also saw losses of $41.8 million with a revenue of $423 million during the second quarter.