Release Date: October 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nanya Technology Corp (TPE:2408, Financial) reported a year-over-year revenue increase of 5.1%, indicating some growth despite quarterly challenges.
- The company is advancing its technology with the production of second-generation 10-nanometer class DDR4 and DDR5, which is on schedule.
- Nanya Technology Corp plans to increase its DDR5 production capacity, expecting significant contributions starting in Q1 2025.
- The company maintains a high utilization rate near 100%, indicating efficient use of its production capacity.
- Nanya Technology Corp is strategically shifting its production focus to DDR5, which is expected to have a higher margin compared to DDR4.
Negative Points
- Nanya Technology Corp experienced an 18% decline in quarterly revenue compared to the previous quarter, primarily due to a power outage and economic downturns.
- The company reported a net loss of TWD1.487 billion for Q3 2024, with a negative margin of 18.3%.
- A power outage caused by a lightning strike resulted in a significant loss of TWD475 million, impacting production and financial results.
- The demand for DRAM in general PC, mobile, and consumer products is slower than expected, affecting overall sales.
- Nanya Technology Corp faces challenges from increased power tariffs in Taiwan, which have risen by nearly 50%, impacting operational costs.
Q & A Highlights
Q: How is the inventory situation at Nanya Technology, and what are the expectations for DDR5 shipments in the fourth quarter?
A: Our inventory level has not improved due to a 20% shipment decline in Q3. However, we are transitioning to our second-generation technology, including DDR5, which should help improve inventory. We are in full production, and DDR5 shipments are expected to gradually increase starting in December and into Q1 next year. - Pei-Ing Lee, President
Q: What is the current status of the Fab 3 ramp-up, and how are pricing trends for DDR4 and DDR5?
A: Fab 3 is ramping up, and we have started wafer input for DDR5. While DDR5 pricing remains strong, the pricing for DDR4, low-power DDR4, and DDR3 is challenging due to high inventory levels among major suppliers. Improvement is expected as capacity shifts to HBM and DDR5. - Pei-Ing Lee, President
Q: What impact do Chinese DRAM makers have on Nanya Technology, and how does it affect your market position?
A: Chinese DRAM makers have a significant impact, particularly in the mobile sector, but Nanya is less affected due to its focus on consumer DRAM. The regional economic situation also impacts demand. Overall, the impact is more significant on larger suppliers. - Pei-Ing Lee, President
Q: Can you provide more details on the third-quarter bit shipment decline and any wafer scrappage?
A: The 20% bit shipment decline was mainly due to regional economic downturns. There was some wafer scrappage due to a power outage caused by a lightning strike, which also led to a temporary production halt. - Pei-Ing Lee, President
Q: What are the expectations for DDR5 sales contribution and power cost impacts moving forward?
A: We expect DDR5 to significantly contribute starting Q1 next year, with 15% of wafer input capacity dedicated to DDR5 by year-end. Power costs have increased by nearly 50%, posing a significant challenge, but we are working with Taipower to improve stability and manage costs. - Pei-Ing Lee, President
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
