Nanya Technology will start making 20nm chips in small volume in the third quarter, and will expand output to 30,000 wafer starts per month by the fourth quarter of 2017, according to the Taiwan-based DRAM firm.

Nanya is looking to expand its output of 20nm chips to 38,000 wafer starts per month in the first half of 2018, when the DRAM maker's overall production capacity will reach 68,000 wafer starts monthly.

Nanya has also revised upward its capex for 2017 to NT$55.7 billion (US$1.85 billion) from NT$34.3 billion, with the additional spending that will be used for the company's transition to 20nm process technology.

Nanya reported consolidated revenues increased 1.1% sequentially to NT$12.23 billion in the first quarter of 2017. During the quarter, the company's DRAM ASPs rose 20.1% on quarter while bit shipments fell 14.4%.

Nanya posted a 40.1% gross margin in the first quarter of 2017, up 9.1pp sequentially, while operating margin surged 10.3pp on quarter to 31.5%. The company reported foreign exchange transaction losses of NT$575 million in the first quarter.

Nanya generated net profits of NT$3.28 billion in the first quarter of 2017, down 83.7% on quarter but up 77.1% on year. EPS for the quarter came to NT$1.19.

DRAM prices are expected to rise up to 10% sequentially in the second quarter, and will continue their growth in the third quarter, according to Nanya president Pei-Ing Lee.

Nanya forecast its bit shipments will register low single-digit sequential growth in the second quarter, but bit shipments for all of 2017 will decrease slightly compared to 2016.