Nanya Technology is shifting its focus to server-use DRAM and mobile RAM targeted at smartphones and tablet PCs, while reducing its reliance on PC DRAM to respond to continued chip price falls and a shrinking PC market, according to Wang Wen-yuan, president of Nanya's parent company the Formosa Plastics Group.
Speaking at Nanya's shareholders meeting on June 14, Wang noted that the company will certainly accelerate its process technology upgrades and step up yield improvement efforts in addition to changes in its product mix. The moves are to assist the company in returning to profitability as soon as possible, Wang said.
Nanya unveiled plans to grow shipments of its non-PC DRAM products with the proportion of total revenues for the segment to exceed 50% at the end of 2011. The proportion is estimated at about 40% at present.
Nanya said it has partnered with tablet PC vendors and handset chip suppliers, and begun shipping mobile RAM chips to the clients. The mobile RAM product line, however, will not contribute to company revenues substantially until 2012.
Nanya also revealed that it is set to ramp chip production using 30nm process technology in the second half of 2011, and expects to trial manufacture products employing 25nm technology in 2012. The company added that it has adequate equipment to support the upcoming technology conversions.
Nanya admitted that the company is likely to continue suffering losses in the second quarter of 2011, and is feeling the pressure to cut prices due to a wider price premium contract prices now have over spot prices. However, the company believes contract quotes for the third quarter should be higher than second-quarter levels thanks to a pickup in seasonal demand.
Nanya remained unprofitable in 2010, the fourth consecutive year of losses for the company. Inotera Memories, Nanya's DRAM-manufacturing joint venture with Micron Technology, also posted losses for the year.
DRAM chip suppliers are now required to obtain state-of-the-art process technology capabilities and optimize product mix, which are the keys to surviving and thriving in this volatile market, industry observers have pointed out.