DRAM chipmaker Nanya Technology has revised downward its capex outlook for 2018 to NT$21 billion (US$681.7 million), down from the NT$24 billion set previously, in a move to decelerate capacity expansion amid unfavorable market conditions.

Nanya expressed less optimism about its performance in the fourth quarter, when the DRAM firm expects its product ASPs to fall about 5% on quarter with flat growth in bit shipments. Nevertheless, the company reiterated its target of 48% bit shipment growth in all of 2018.

Nanya also indicated it will start shipping in small volume server DRAM memory in the fourth quarter as its 8Gb DDR4 products have been qualified by first-tier datacenter clients. Shipments for servers will expand at a gradual pace in 2019, when the chipmaker expects its server product line to account for 10-15% of total revenues.

Nanya reported consolidated revenues of NT$24.38 billion for the third quarter, down 0.9% sequentially. The company's product ASPs remained flat on quarter while bit shipments registered a low single-digit decrease.

Improvement in manufacturing costs boosted Nanya's gross margin to a record-high 58.9% in the third quarter. Sales of the company's 20nm DDR4 products accounted for 30% of its total revenues during the quarter.

Nanya generated operating profits of NT$12.43 billion - also a record high - in the third quarter, with a 51% operating margin. The company posted net profits of NT$12.87 billion for the quarter, up 13.8% sequentially, with EPS reaching NT$4.15.

Nanya's net profits for the first three quarters of 2018 came to NT$67.76 billion, with EPS arriving at NT$10.23.

Nanya forecast DRAM prices will drop moderately during 2019. DRAM prices are unlikely to fall steeply and quickly in the same way as they did before since major suppliers will be better controlling their output, the Taiwan-based company commented.