Nanya Technology and Inotera Memories are expected to post their fourth straight quarterly losses if prices for mainstream 1Gb DDR3 memory slip below US$1.
The price of 1Gb DDR3 chips has slipped below the US$2 mark, dragging down early October contract prices for 2GB DDR3 modules by 6-9%. The downward price trend will continue through the end of 2010.
Affected by low yields during their process transitions and recent weakness in chip prices, Nanya's and Inotera's third-quarter net losses are likely to widen to over NT$2 billion and NT$3 billion, respectively. Inotera's relatively weak result was due to its process transition from trench to stack technology, which caused its output to drop significantly between July and August.
Inotera stands a good chance of returning to profitability in the fourth quarter, if prices for 2Gb DDR3 chips are able to remain above US$2. Inotera is set to convert all of its capacity (130,000 wafers/month) to a 50nm node by year-end 2010, and able to reduce its cost substantially.
Nanya and Inotera will jointly hold their investors conference on October 20, to discuss their performance in the second quarter and guidance for the third.
Fellow DRAM company Powerchip Technology has announced that excluding contribution from Rexchip Electronics, its net profits for the third quarter climbed to NT$1.94 billion for the third quarter of 2010. While combining those from Rexchip, Powerchip's third-quarter net profits reached almost NT$3 billion.
Powerchip's 63nm process technology transition will reduce its manufacturing cost to about US$1.40, meaning it can only be remain profitable in the fourth quarter if prices for 1Gb DDR3 are maintained above the level.