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To: Estephen who wrote (66682)	2/27/2001 11:16:20 AM
From: Don Green	Read Replies (1) \| Respond to of 93625

Nanya Technology Sees Possible Loss in First Quarter Taipei, Feb. 27 (Bloomberg) -- Nanya Technology Corp., one of Taiwan's largest makers of computer memory chips, said it will probably post a loss in the first quarter on falling chip prices. Revenue in January fell 14 percent from the previous month to NT$849 million ($26 million), the company said. Narrowing margins forced Nanya to cut its earnings forecast twice in the past four months and shelve plans for a new factory. ``I think we'll make a loss in the first quarter,'' said Executive Vice President Charles Kau. ``So far the first quarter is worse than the fourth, though we've increased productivity.'' Nanya earned NT$3.12 billion in the first nine months of 2000 on revenue of NT$11.3 billion. It earned NT$511 million in the first quarter of 2000. Full-year results will be announced in March, the company said. Memory chip prices have headed south of late. The spot price for a benchmark 64-megabit dynamic random access memory chip fell to $2.27 Monday, from $8.17 when Nanya listed on Taiwan's main index last August. ``The DRAM price is below manufacturing cost, so there will definitely be losses,'' said Connor Liu, an analyst at SG Securities Investment Consulting Co. ``Not only Nanya, all DRAM makers in Taiwan will post a loss in the first quarter.'' Nanya is looking to reverse the trend in the second quarter producing more high-speed memory chips that run at double the speed of current chips and sell for over twice as much. ``It depends on how successfully we can promote DDR (chips) in April, May and June.'' said Kau. ``There's still some uncertainty, but we're seeing a pick-up in the market.'' New Orders Nanya received orders for 1.2 million chips for March and will ship a million so-called double data rate memory chips next month and up to seven million by June, said Kau. Chipmakers such as Intel Corp. and Advanced Micro Devices Inc. have boosted the speed of processors -- the main chip in a computer -- to make personal computers work faster. Conventional memory chips, though, are unable to keep pace with these processors, limiting a PC's performance. To clear the bottleneck, enhanced memory chips, such as DDR, are useful. To Nanya's benefit, it's DDR chip costs less than $5 to make, almost the same as a regular memory chip, although it can sell for as much as $11, more than double the cost. With a three- to four-month lead over its Taiwan rivals, Nanya aims to exploit its position as the sole volume producer of DDR chips while prices remain firm. ``They'll make good money because the DDR price is still quite high,'' said Liu. ``But we expect the price to fall as more supply comes into the market.'' Nanya is likely to get a helping hand from Taiwan's chipset makers, such as Via Technology Inc., which are producing chipsets requiring DDR memory chips. ``If we have enough orders, we'll switch entirely to DDR,'' said Kau. Via introduced its chipsets using DDR memory chips in September. The world's second-largest chipset designer chose the DDR chip as a cheaper alterative to a standard developed by U.S.- based chip designer Rambus Inc. From a high of NT$77.50 at the end of August, Nanya shares fell nearly four-fifths to touch NT$17.4 at the beginning of January. It rose NT$0.40, or 1.64 percent, to NT$24.80 today.