03.23.2001
Nintendo and Palm deals may prove a lifeline for Macronix

• Nintendo and Palm will account for 30% and 5% of Macronix's (2337 ‘Wang Hong’) revenue in 2001. Both companies are expected to achieve strong growth on expansion of the branded game machine and PDA markets.

• Macronix announced a capacity guarantee lease agreement with Nintendo yesterday, under which Nintendo will acquire US$75m worth of equipment to be leased to Macronix and installed in its Fab 2.

• Macronix will use the capacity to produce Nintendo's GameBoy Advance (GBA) and Game Cube components. The arrangement could be described as an equipment financing deal, indicating that ties between the two sides are strong.

• Macronix supplies Palm with Mask ROM on two new models, M500 and M505, to be released in April and May, respectively, this year. However, Palm recently said it is expecting slower growth in the electronics organizer market this year due to economic slowdown in the US.

• The new deals come as a boon for Macronix’s prospects. However, we are keeping a wary eye on the recent decline in Macronix's revenue and on declining flash spot prices.

LindaLiu@Primasia.com +886-[0]2-2547-8867