Powertech Technology (PTI) has guided that its third-quarter consolidated revenues will see a sequential decline with a lower gross margin, citing a fall in demand for DRAM packaging and testing.
PTI chairman DK Tsai said during a July 28 investors meeting that DRAM customers are proposing major cutbacks in production in order to stabilize chip prices. As a result, PTI's shipments for DRAM chips will drop substantially in the third quarter, Tsai indicated. He did not disclose any company names.
On the other hand, shipments for the non-DRAM products including flash and logic ICs will be relatively strong in the third quarter to partially offset drops in those for DRAM chips, Tsai noted. PTI's overall revenues for the quarter are therefore only expected to see a moderate slide from the prior quarter's levels, Tsai said.
PTI previously estimated that its revenues would stay flat sequentially in the third quarter with a possibility of low-single digit growth.
PTI is uncertain about the demand outlook for the last quarter of 2011, in particular, the DRAM market, according to Tsai. Another production cutback may be carried out in the DRAM industry in the fourth quarter if demand remains weak, said Tsai.
DRAM demand from the end-markets, mainly PC and mobile products, thus far in 2011 seem to have been disappointing, Tsai added.
PTI reported NT$1.86 billion (US$64.5 million) in net profits on consolidated revenues of NT$10.26 billion for the second quarter of 2011. EPS for the second quarter came to NT$2.56 compared to NT$2.30 in the prior quarter and NT$2.82 a year ago.
PTI said that second-quarter results came within the company's guidance.
PTI's consolidated sales increased 11.6% on year to NT$20.02 billion in the first half of 2011, while net profits slid 6% from a year earlier to NT$3.53 billion. EPS stood at NT$4.86 for the first half of 2011, compared with NT$5.34 for the same period in 2010.