Macronix reports record profit in Q3

OUTLOOK: The company is counting on price increases instead of capacity expansion for rapid growth in the short term, Macronix chairman said

• By Lisa Wang / Staff reporter

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Macronix International Co (旺宏), a major supplier of NOR and NAND flash memory chips, on Tuesday reported a record-high net profit of NT$10.95 billion (US$337.8 million) in the third quarter, a surge of 42 percent from NT$7.74 billion in the previous quarter, reversing a net loss of NT$862 million a year earlier.

Gross margin rose to an all-time high of 70.5 percent last quarter from 64.4 percent in the previous quarter and 13.5 percent in the same period last year, the company said.

Despite investors’ concerns over cooling multilevel cell NAND flash prices, “there is still room for growth for Macronix,” Macronix chairman Miin Wu (吳敏求) said at an earnings conference.

Macronix International Co chairman Miin Wu poses at the company’s headquarters in Hsinchu Science Park in an undated photograph.

Photo courtesy of Macronix International Co

“Any investment nowadays requires a waiting period of at least a year,” Wu said. “In the short term, the company is unlikely to rely on capacity expansion for rapid growth. Instead, near-term growth will be driven primarily by price increases.”

Macronix said it expects chip price hikes to persist this quarter, driven by a capacity crunch and robust demand for artificial intelligence memory chips.

The company plans to begin boosting output in the second half of next year based on its first-phase capital expenditure of NT$22 billion, Wu said.

The company does not expect another NT$15.8 billion capacity investment to yield output until 2028, he said, citing delays in manufacturing equipment delivery.

The new capacity would be reserved for producing NAND flash memory chips used in embedded multimedia cards (eMMCs) or 3D NAND chips, the company said.

Macronix said that, following the exit of key suppliers such as Samsung Electronics Co, it expanded its eMMC NAND business severalfold over the past year, and anticipates vast growth opportunities for new 3D NAND chips next year.

The shift “is not due to slowing demand for NOR flash. Rather, we are allocating capacity to NAND, a high-growth segment that will drive Macronix’s long-term expansion,” Wu said.

“Demand for NOR used in data centers is very robust. Customers are chasing us for more capacity, demanding that we deliver more NOR flash solutions for data centers,” he said.

The company’s NOR flash business would focus on high-value segments, including space communications, automotive, industrial and medical devices, he said.

At the same time, Macronix is gradually phasing out of ROM production, Wu said.

ROMs are used in Nintendo Co’s Switch game consoles.

Separately, Wu was awarded an honorary doctorate by National Central University yesterday. The university said it recognized his “unwavering” commitment to developing proprietary technologies and an independent brand over the past 50 years.