INTERVIEW-Numonyx sees return to profit in coming qtrs
* Numonyx to more than double capital budget in 2010
* Aims to grow at twice market rate for handset memory
* Sees 1/3 of revs from NAND in 2010, vs 20-plus pct in 2009
By Doug Young
HONG KONG, Nov 30 (Reuters) - Numonyx, the world's No. 3 maker of flash-type memory chips, said on Monday it expects to become profitable again in coming quarters as the sector emerges from a long downturn, and gain market share as its chief rival struggles.
The privately held Switzerland-based firm, formed last year using memory chip assets from STMicroelectronics (STM.PA) and Intel (INTC.O), came close to breaking even in the third quarter, Chief Executive Brian Harrison told Reuters in a phone interview.
"We expect to be profitable in the coming quarters, but we're not making any predictions," he said. "We're in a good position. We have lowered our cost base substantially."
Numonyx and larger peers such as South Korea's Samsung (005930.KS) and Japan's Toshiba (6502.T) have suffered for much of the last two years in one of the worst downturns on record for the highly cyclical memory chip sector.
That downturn played to the benefit of Numonyx, which specialises in cellphone memory, as its chief rival Spansion SPSNQ.PK slumped into bankruptcy.
Harrison said his company has picked up business as a result of Spansion's woes, catering to customers concerned about dealing with a company in bankruptcy.
"As we look to 2010, we will more than double our spending to grow our capacity," Harrison said. "We expect that the overall memory market will grow about 9-10 percent for handsets. We think we'll grow at more than double the rate of the market, so I think we'll grow in the greater-than-20 percent range."
Revenue for the global semiconductor market as a whole is expected to drop 12.4 percent for the year as consumers cut back on spending on everything from PCs to cellphones and other chip-using devices, according to iSuppli.
While the decline was sharp, it was still significantly better than the 20 percent plunge iSuppli predicted early in the year, with revenues growing sequentially in the second and third quarters after reaching a low in this year's first quarter.
Harrison said Numonyx became the global leader in a type of memory called NOR, a position formerly held by Spansion, in the second quarter and was expecting to have about a third of the market in the third quarter.
Numonyx has also diversified over the last year into NAND, another type of memory with strong growth potential, through a tie-up with South Korea's Hynix Semiconductor (000660.KS).
"Our NAND when we exited 2008 was less than 10 percent of revenues," Harrison said. "We will exit 2009 with more than 20 percent of our revenues coming from NAND, and expect to double that again in absolute dollars. About a third of our revenues in 2010 will be in NAND."
He declined to comment on the company's timeline for a potential IPO, a possibility for the company down the road.
"In the fourth quarter we are reaching full and complete independence from our parent companies," he said. "That's one of the major milestones necessary for us to be a pubicly listed independent company. The market conditions have to be right."
(Editing by Don Durfee and Ken Wills)
((doug.young@thomsonreuters.com; +852 2843-1631; Reuters Messaging: doug.young.reuters.com@reuters.net))
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