Transcend Information chairman Peter Shu has expressed optimism about DRAM and NAND flash market conditions in the second half of 2011, which he believes will be be favorable on the operations of memory module makers such as his company.
With major chip producers giving more emphasis to mobile RAM and NAND flash memory, which have better growth potential, this trend could negatively impact PC DRAM availability in the second half of the year and result in undersupply followed by price increases, Shu said.
As for NAND flash, strong demand coming from the smartphone and tablet PC sectors is expected to help sustain chip prices, Shu indicated. But he does not expect prices to go too high too quickly. Keeping their steady growth is more important, Shu added.
Shu's remarks echoed a recent statement made by Kingston Technology co-founder David Sun. Sun stated that demand for NAND flash is likely to outstrip supply substantially in the second half of 2011, while PC-use DRAM memory would also be in tight supply due to limited output from chip vendors.
In addition, Shu also commented that business cycles are no longer a problem for Taiwan-based DRAM chipmakers. They should be more aware of any lack of key production technologies, Shu noted.
Regarding Transcend's business in 2011, Shu said the company is focusing on enhancing its SSD product line as well as server DRAM products. Transcend is also looking to grow sales generated from its high-margin industrial memory products, Shu indicated, adding that the segment will account for 30% of company revenues.
In other news, Transcend recently opened its new plant in Neihu, Taipei, which houses nine production lines. The company plans to install another 18 production lines at the plant, and hire an additional 800 staff for the facility.
Transcend reported net profits of NT$888 million (US$31 million) on revenues of NT$7.58 billion for the first quarter of 2010. EPS came to NT$2.09 compared to NT$0.68 in the prior fourth quarter of 2010 and NT$1.20 a year ago. Market watchers expect the company to see flat growth sequentially in second-quarter revenues and profits.