Macronix 2005 revenues down 19%, but company projects growth this year on Mask ROM shipments and migration to 0.13-micron production

Although Taiwan memory maker Macronix International Company (MXIC) reported an on-year decline of 19% on sales of NT$18.5 billion last year, and losses of NT$7 billion, the company projects its revenues will grow this year on ramping Mask ROM orders for the new Nintendo game console and advancements in manufacturing processes.

Macronix reported that its gross margins grew to 17% in the fourth quarter, up from 9% in the third quarter, while its utilization rate remained over 100% for its 8-inch wafer production in the second half of 2005.

Projecting the 2006 business outlook, Macronix expects that its previously announced capital downsizing will help improve its financial structure. The company also regards Nintendo’s new game console as a potential revenue driver. Mask ROM shipment accounted for 47% of the company’s sales in 2005.

Costs should also be trimmed, as the company advances on its process node manufacturing technology, the company indicated. The company will continue migrating to 0.13-micron production and expects related costs to be reduced 25-30% accordingly. The contribution from 0.15-micron production contributed 43% of the company’s sales in 2005.

The company has budged NT$3.3 billion for capital expenditure (capex) this year, with a majority of the budget scheduled for 0.13-micron migration and growing the density on its NOR flash. The company indicated that 80% of its 2006 capex would be allotted for front-end production at its 8-inch fabs with the remainder for related testing equipment.

By selling its empty 12-inch fab shell to memory maker Powerchip Semiconductor Corporation (PSC), Macronix also expects to save NT$0.9-1 billion per year on interest rate costs.

Source: company, compiled by DigiTimes, February 2006.

Source: company, compiled by DigiTimes, February 2006.

Article translated by Esther Lam and edited by Michael McManus