Macronix (MXIC), the world’s biggest supplier of NOR flash memory chips, yesterday said it plans to allocate NT$41.5 billion (US$1.48 billion) to expand 12-inch wafer capacity for advanced 3D NAND and NOR flash memory chips, as it has technology readiness and there is robust market demand.

Some of the new chips will be designed for vehicles, Macronix said.

The company aims to this year become the world’s largest supplier of NOR flash memory chips used in automobiles.

Macronix International Co president Lu Chih-yuan is pictured in Taipei in an undated photograph. The company yesterday said it plans to allocate NT$41.5 billion (US$1.48 billion) to expand 12-inch wafer capacity for advanced 3D NAND and NOR flash memory chips.

The outlay is for a second-phase expansion of Macronix’s Fab 5 in Hsinchu, and the company expects to ship the first chips from the new production line in the fourth quarter of next year, while the line would begin contributing revenue in 2023.

“We will be very careful and disciplined in carrying out this capital expenditure plan,” Macronix president Lu Chih-yuan (盧志遠) told investors during a quarterly online conference.

“It is a multi-phase capacity expansion plan,” Lu said.

The capacity expansion would help boost Macronix’s profit growth and enhance its flexibility in product allocations, Lu said.

The Fab 5 is to have an installed capacity of 40,000 12-inch wafers per month, up from 20,000 wafers, he said.

The new investment would not compromise its gross margin, he said.

Gross margin improved to 39.1 percent last quarter, the highest since the second quarter of 2018.

Macronix’s net profit surged 45 percent to NT$1.93 billion last quarter on higher shipments and better prices, compared with NT$1.33 billion a year earlier.

On a quarterly basis, net profit soared 110 percent from NT$916 million, the company said.

Earnings per share increased to NT$1.04, from NT$0.72 a year earlier and NT$0.5 last quarter, it said.

The company is upbeat about this quarter, expecting full factory utilization on the back of robust demand.

“We expect this situation to extend into this quarter. We are optimistic about the fourth quarter,” Lu said. “We do not see any negative indicators.”

The company expects strong demand for read-only memory (ROM) chips due to seasonal factors, Lu said.

Macronix is a long-term ROM supplier to Nintendo Co.

ROM chips accounted for 27 percent of Macronix’s total revenue last quarter, compared with 26 percent in the first quarter. NOR memory chips made up 50 percent, while NAND memory chips contributed 16 percent. The remaining 7 percent was from foundry services.

Macronix expects to strike a deal with a potential buyer for its 6-inch fab this summer.

The fab has contributed NT$1.3 billion to NT$1.4 billion a year in revenue.

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