The revenue for memory firms from Taiwan reveals that the demand for memory chips fared quite good despite the expected hit from the COVID pandemic. The revenue for the month of April was around $16.53 million, which is a 24.3% YoY growth compared to the revenue for April last year of $13.3 million.
Out of the six major player, five of them posted a positive YoY growth rate, with only Transcend Information Inc. (TPE: 2451) reporting a drop in the YoY sales of about 26.3%. The highest YoY revenue growth rate was posted by Macronix International Co. Ltd (TPE: 2337) at 64.4% followed by Nanya Technology at 36.7%.
The revenue was expected to be affected negatively as the economy slows down due to the global pandemic. But as the lockdown confided people in their homes they forced to work from home and learn remotely. This resulted in strong sales for the memory firms.
The US-China Tensions
On 29 May, 2020 the US Department of Commerce took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get permission of the US government before shipping chips to the Chinese firm if they use US software or equipment during production.
Macronix International Co said that it does not expect the shipment of the memory chips to Huawei Technologies to be affected by these export restrictions on the Chinese tech giant by the US. Adding that the trade restrictions would not apply to non-US semiconductor firms making chips that are not designed by or developed by Huawei.
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The top players among the Taiwanese memory firms are Nanya Technology Corporation (TPE: 2408) and Winbond electronics corporation (TPE: 2344). With Nanya Technology and Winbond Electronics contributing about 33.9% and 26.29% respectively, to the total revenue generated.
For Winbond Electric the quarterly DRAM revenue for 1Q 20 saw little change from the previous quarter as there were no major QoQ changes in the ASP and bit shipments. But the company reported a noticeable gain in the NAND flash revenue for the quarter. The company has also planned to start construction of a second 12-inch wafer manufacturing facility in Kaohsiung in Southern Taiwan. As they look for further expansion and growth of flash manufacturing at the Taichung facility to meet the demands of new applications of flash memories like Artificial Intelligence, Automotive, Storage, Networking and 5G expansion.
Nanya Technology reported a 10% QoQ growth rate in its revenue for first quarter of the year, as it was able to raise its bit shipment. Nanya’s operating margin also made a recovery from 11% in 4Q19 to 12.7% in 1Q20, due to the effective control of the R&D cost. On 1 June, the shareholder of Nanya Technology approved a cash dividend distribution of NT$1.5 per common share. This represents a yield of 2.46 based on the chipmaker’s share price of NT$60.9 in Taipei trading.
What does it mean for Micron Technology?
Recently Nanya Technology said that the rising data traffic has further spurred demand for faster Internet connections and driven demand for cloud-related equipment and networking devices. This reflected the optimism of Micron Technology Inc (NASDAQ: MU) about the next quarter. The US chip-maker has raised its forecast to between US$5.2 billion and US$5.4 billion, from an earlier estimate of between US$4.6 billion and US$5.2 billion. As the pandemic has surged the demand for Internet-related equipment, game consoles and software, also accelerating 5G deployment worldwide.
Micron products are used in the gaming and data center market and its new DRAM chips are expected to have a niche in 5G. And last month the chip-maker revealed that its DRAM memory chips and its NAND long-term storage chips are featured in top-end Chinese-made 5G smartphones. They expect to have a worldwide presence in 5G soon. The flagship 5G smartphones are expected to have at least 8 GB of DRAM, compared to the 6 GB standard for 4G smartphones along with the NAND storage capacities to increase up to 64/128 GB from 32/64 GB earlier.
Micron estimates sales of roughly 450 million from the 5G phone units for 2021 and to expand over the next few years. Hence, the US chip maker expects 5G bit growth for DRAM (memory) to hit 15% and NAND (storage) to increase by 30% for 2020.