Nanya Technology has estimated 2019 capex at about NT$10 billion (US$324.3 million), significantly lower than the NT$20.4 billion spent in 2018.

Nanya in October already cut its capex estimate for 2018 to NT$21 billion from the NT$24 billion set previously in a move to decelerate capacity expansion amid unfavorable market conditions. The actual capex showed a further reduction to reflect the company's more conservative attitudes.

Nanya with the company's low-power DRAM products is looking to strengthen its presence in the server sector this year, but the overall market conditions remain unfavorable prompting the company to lower further its 2019 capex budget, according to Nanya president Lee Pei-ing.

A global economic slowdown and trade disputes between the US and China have led to excess inventory in the supply chain, said Lee, adding that CPU shortages have also dragged down further demand for DRAM chips and other related PC components. Lee expressed caution about the overall DRAM market demand in 2019.

Nevertheless, Lee is positive about DRAM demand in the long term citing the emerging AI and 5G applications.

Nanya may have difficulty achieving revenue growth in 2019, but its bit shipments for the year are forecast to climb 10-15%, according to Lee.

Nanya announced consolidated revenues of NT$84.72 billion (US$2.75 billion) for 2018, up 54.3% on year. During the year, bit shipments increased in the mid-30% range compared to 2017 while ASPs rose in the mid-teens. The company posted a 55% gross margin last year, up from 44.9% in 2017, while operating margin climbed to 46.5% from 34.2%.

For the fourth quarter of 2018, Nanya saw its bit shipments decline in the low-20% range sequentially while ASPs dropped in the low-teens. The company reported consolidated revenues decreased 30.4% on quarter to NT$16.96 billion, with gross margin and operating margin falling 6pp and 9.2pp, respectively, to 52.9% and 41.8%.

Nanya collected NT$7,09 billion in operating profits in the fourth quarter of 2018, down 43% sequentially, while net profits declined 38.2% on quarter to NT$7.95 billion. EPS for the quarter came to NT$2.57.

Nanya generated operating profits of NT$39.355 billion in 2018, up over 100% from NT$18.79 billion a year earlier, but net profits slipped 2.3% on year to NT$39.36 billion. EPS arrived at NT$12.80, compared with NT$14.36 in 2017.