Elpida net profit up, but memory chip production to be reduced
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Elpida Memory has reported a net profit in the July-September quarter from a year earlier loss, but announced plans to reduce the production of memory chips used in personal computers. The company cited weakening demand and a sharp decline in prices.
The DRAM manufacturer posted a net profit of Y9.22billion for the fiscal second quarter, compared with a net loss of Y7.17bn in the same period a year earlier.
Despite the improvement, the result was lower than the company's April-June net profit of Y30.67 bn. The on quarter decline was caused by falling DRAM chip prices as well as the yen's recent strength, which erodes the value of overseas sales when translated into the Japanese currency.
Starting this month, Elpida will cut its production of DRAM chips for PCs to 170,000 silicon wafers a month from 230,000, the company said.
"We want to avoid a steep price decline by all means," said President Yukio Sakamoto at a news conference in Tokyo. He said he expects production to stay at the lower level until around February.
Elpida said that average DRAM prices in the July-September quarter dropped 16% from the April-June period.
It also said that pc demand is weak particularly in Europe and the US.
