Nanya and Inotera Post Huge Profit in 2014

Nanya Technology Corp. and Inotera Memories Inc., both subsidiaries of the Formosa Plastics Group (FPG), together posted an estimated NT$74 billion (US$2.38 billion) in after-tax net income last year, setting new highs in both companies' history.

Inotera estimates its after-tax net income at over NT$47.5 billion (US$1.53 billion), or NT$7.26 per share, last year, topping expectations to become the most profitable subsidiary in the group.

The earnings have recouped all of the two companies' losses piled up over the past years.  Nanya will pay dividend this year from 2014 earnings for the first time in seven years.

Nanya posted the net income out of revenue of NT$49.10 billion (US$1.53 billion), rising 8.5 percent year on year to hit four-year high, and Inotera's out of NT$82.69 billion (US$2.58 billion), surging 40 percent year on year to set all-time high.

Industry executives estimate Inotera earned NT$14 billion (US$451.61 million) in Q4, 2014, increasing 22 percent from the previous quarter, partly thanks to the devaluation of NT-dollar against US dollar. Throughout last year, the company posted an estimated net NT$47.5-47.6 billion (US$1.532-1.534 billion), or NT$7.26-7.28 per share, topping projected NT$6.5-7 per share.

They put Nanya's earnings for Q4, 2014 at NT$7.1 billion (US$229.03 million), helping boost its profit for the whole year to NT$26.8 billion (US$864.51 million), or NT$11 per share, to beat the projected NT$10.

Both companies will launch its phase-two restructuring plan and technology-upgrading plan this year to further boost profit and become the world's most-wanted dynamic random access memory (DRAM) makers.

Inotera is migrating to 20-nanometer process from 30nm, with plans to begin volume production using the latest process sometime in Q2, 2015 and end this year with 80 percent of production on 20nm process.

FPG executives point out that DRAM applications have become diversified when the industry is growing oligopolized, suggesting that a few suppliers will provide memory chips for a multitude of application devices beyond PCs.

Industry executives fear that Inotera's profit for 2015 will decline from 2014 for Micron Technology Inc., its other holding company, may request reduction in selling prices.

Inotera is making 30-nanometer DDR4 DRAM chips contracted by Micron for server PC, which accounted for around 40 percent of Inotera's total revenue for Q4, 2014, with 30 percent of its revenue generated by chips for standard PCs and the rest by chips for mobile devices.

(KL)