08.07.2001
Nanya Tech revisions in negative territory

• Development: Nanya Tech revised ’01 sales projections from NT$30.5bn down to NT$15.9bn, a 48% reduction. The firm’s pretax target was severely cut from positive NT$2.1bn to negative NT$7.5bn, leading to an after-tax target downward revision from NT$2.3bn to negative NT$5.9bn, with ’01 EPS estimated at negative NT$2.60.

• Analysis: Heavy losses in DRAM price are behind the revisions, as 128MB DRAM spot price dropped 66.3% from April to July. Nanya Tech’s new financial projections are based on 128MB DRAM prices reaching US$3.0 by year’s end, or 113% upside. We believe this expectation is far too optimistic.

• Primasia View: DRAM remains in over-supply. We anticipate continued losses for Nanya Tech in 2H01.