Memory market emerging from slump

Siu Han, Taipei; Eifeh Strom, DIGITIMES Asia 0


The memory chip market is coming out of its slump, with server and PC applications driving the recovery, according to sources at memory module makers.

Despite a slow first quarter, the memory supply chain anticipates gradual improvement in the second quarter, starting with upstream companies.

Nanya Technology's April consolidated revenue reached a four-month high of NT$2.26 billion (US$73.68 million), increasing 5.3% sequentially but falling 65.75% on year.

Macronix International's April consolidated revenue increased 6.5% sequentially and fell 22.5% on year to a six-month high of NT$3.01 billion.

However, downstream memory module companies are still seeing revenues ebb.

Adata Technology's April consolidated revenue fell 16% sequentially to NT$2.13 billion. Accumulated consolidated revenue from January-April totaled NT$9.34 billion, falling 26% on year.

Adata chairman Simon Chen noted that the market took a wait-and-see attitude for April when it was reported that upstream suppliers would reduce production.

The confirmation of production reduction by suppliers at the end of April is expected to help stabilize operations in the second quarter and second half.

The announcement has also helped stabilize DRAM spot prices. Once DRAM spot prices bottom out, downstream customers are expected to replenish inventories. DRAM shipments in the second quarter are expected to outpace the first.

Adata is optimistic that AI will drive server recovery and expects PC applications will improve after undergoing inventory corrections.

On the other hand, more time is required to clear NAND inventory. Adata expects NAND prices will continue to fall, but may bottom out after the traditional peak season for consumer electronics accelerates memory inventory clearances in the fourth quarter.

DRAM accounted for 46.53% of Adata's April revenue, followed by SSD products at 33.29% and 20.18% from memory cards, USB drives, and others.

Apacer Technology's April consolidated revenue fell 36.6% sequentially and 29.9% on year to NT$512 million.

Since merging with industrial control module maker UD Info last August, Apacer has optimized and improved its product mix. Gross margin in the first quarter reached 22.3% while profit after tax reached NT$128 million.

Apacer believes that consumer market demand in the second quarter is still unclear and further observation is needed to see how production reduction will affect the market.

Apacer added that end demand will impact memory prices, while tenders in the second quarter with higher gross margins are anticipated to support single-quarter gross margin performance.