DRAM specialist Nanya Technology's losses widened in 2008, during which its capital expenditure (capex) was sharply slashed due to the general economic decline. Inotera Memories, Nanya's joint venture with Micron Technology, swung to losses last year, with a negative earnings per share (EPS) of NT$5.41.
Nanya posted net losses of NT$35.23 billion (US$1.05 billion), or a negative EPS of NT$7.54, for 2008. Inotera recorded losses of NT$18.07 billion. Both DRAM makers are looking to significantly lower their capex budgets for 2009, according to the companies.
Nanya spokesperson Pei-Lin Pai said that the company's 2008 capex was slashed from the originally estimated NT$40 billion to NT$12 billion, as worsening economic conditions was depressing demand throughout the year. Nanya may have difficulties in turning profitable in the first or second quarter of 2009, according to Pai. For 2009, Nanya intends to cut its capex budget further, and may ask its parent company Formosa Plastic Group to increase its investment in Nanya, said Pai.
Nanya's bit growth for 2008 reached about 57%, but the percentage will likely drop to only 37% for this year, Pai noted. The company has seen its bit growth slide to 15-20% since the fourth quarter of 2008, due to capacity cuts, according to Pai.
Nanya's capacity is estimated to shrink 30-40% in the first quarter of 2009 while transferring to Micron's process, Pai indicated. Nanya aims to migrate all of its 12-inch wafer production, which currently reaches 30,000 units per month, to Micron's 68nm node process by 2009, according to Pai.
Inotera president Charles Kao said that the company's bit growth in the fourth quarter of 2008 dipped 8% sequentially, and the percentage will likely drop further for the following quarters. Inotera's capex for 2008 reached NT$19.7 billion, down from NT$30 billion that was originally estimated, according to Kao.
Inotera plans to enter into trial production using Micron's stack process technology in the third quarter of 2009, said Kao, estimating that the process transition requires about NT$6 billion. Micron's stake in Inotera will be increasing to 50% in the next nine months, up from 35.6% at present, Kao added.
In addition, Inotera has reduced its shipments to Qimonda since the fourth quarter of 2008, with the shipment proportion dragging down to 40%, Kao indicated. However, shipments to Qimonda may grow, as the German DRAM maker has gained bailout support from its government, Kao expects.