February 2, 2007 – Macronix International Co. Ltd. enjoyed five-year highs in profit margins and earnings last year due in large part to “swarming” orders from Nintendo for Mask ROM chips and improved costs for flash-memory production, and another boost in 2H07 will require significant additional capacity investments, according to the Taiwan Economic News.

Macronix has planned capex of $90-$106 million for 2007, most of it to be spent in 2Q-3Q, as the company absorbs increased outsourcing capacities, the paper noted, adding that Macronix is reportedly purchasing additional capacity from Nanya Technology Corp. to help meet demand.

Gross profit margins in 4Q surged to a record 39% with 22% higher earnings vs. the prior quarter, and a 23% revenue growth in 2006 was heavily driven by Nintendo’s 50% boost in Mask ROM chip orders.

Shipments are expected to seasonally decline 10% in 1Q07 (though still 29% higher than a year ago), and ASPs may fall as much as 15% as a result of oversupply. But growth is expected to quickly pick back up again, amid continued demand for Nintendo game consoles, and a ramp of Macronix’s 512MB and 1GB Xtra ROM chips, based on 100nm process technologies.

16GB and 22GB products are in early stages of development, and the company is seeking a partner to help with production, the paper said, citing Macronix president/chairman Minn Wu. Development of NAND flash chips using SONOS technology is expected to be completed in about four years; in the meantime the company will ramp volume production of 45nm-based chips, he said.