Rock bottom prices for computer memory says Transcend
Peter Shu, the chairman of Transcend Information announced recently that prices for both DRAM and NAND flash memory have gone down to its lowest and could not be getting any lower from the current price. Shu stated that though in 2011, chip prices were significantly dragged to its lowest price but the company was still able to boost shipments as a measure to tone down the impact.
Transcend’s acquired profit for 2011 increased significantly to almost 100% though lacking on overall revenue growth, Shu stated.
Transcend in its report stated that its consolidated revenues of US$1 billion for 2011 demonstrated a decrease of 6.1 per cent. Nonetheless, the overall net profit for the year rose to 94.3 per cent to US$0.097 billion. When the earnings were translated into Earnings per Share (EPS), it accounted for about US$0.227.
Shu was able to attribute the increased profits to the company’s concentration of high-margin memory modules for industrial and other niche-market use, and high-end flash devices such as Class 10 SD cards.
The company revealed that its combination of shipments which include memory modules and digital photo frame and portable electronic devices amounted to 100 million units in 2011, a marked increase of 25 per cent from the 790,00 being shipped in 2010. The gross margin rose to 16.47 per cent in 2011 from a mere 11.85 per cent in 2010.
Transcend revealed that of the total revenue acquired in 2011, 64.56 per cent was derived from sales of NAND flash devices which is followed by strategic products accounting for about 18.24 per cent. However, the quantity of DRAM-module sales decreased to 17.2 per cent in 2011 from 25.79 per cent on the previous year influenced by falling prices.
Transcend’s target market still focused on Europe with sales amounting to 37.2 per cent from the total company revenue in 2011, followed by Asia with 28.13 per cent and the US with 10.7 per cent.
The company also stated that it has accumulated revenue up to US$0.328 billion in cash on hand and US$0.152 billion worth of inventory.
On future projection of the company, Shu expects it to benefit from another prosperous year in 2012 with flat gross margin.