Macronix, a leading memory manufacturer, reported a challenging first quarter of 2024, with revenue falling to NT$5.76 billion, a 1% decrease from Q4 2023. The company’s operating gross profit saw a slight increase of 3% from the previous quarter but a significant 36% drop year-over-year, highlighting the volatile memory market’s impact on its financials.
The decline was primarily due to reduced performance in the read-only memory (ROM) segment, which traditionally has been a strong revenue driver for Macronix. ROM sales, which plummeted by 27% from the last quarter and 51% from the same period last year, accounted for only 18% of the total revenue in Q1. The company’s Chairman, Wu Minqiu, cited reduced sales to Nintendo, a key client, as the current ROM products near the end of their lifecycle with the aging Nintendo Switch platform.
In contrast, other segments showed more promise. The NOR Flash revenue, constituting 61% of the total, rose by 8% from the previous quarter, although it still marked a 7% decline year-on-year. NAND Flash and Wafer Foundry segments, on the other hand, recorded increases in revenue, showing signs of recovery and adaptation in Macronix’s product offerings.
Macronix is actively focusing on innovation to offset the declining ROM sales. It plans substantial investments in research and development, with expenditures projected to exceed NT$6 billion in 2024. This R&D push includes developing 96-layer stacked 3D NAND Flash intended for gaming applications, with sample deliveries expected in the second half of the year and revenue generation anticipated in 2025. Additionally, the development of 196-layer stacked 3D NAND Flash is underway, targeting major Japanese customers and other markets.
Despite these initiatives, Macronix is maintaining a conservative approach to capital expenditure, with a planned spend of NT$7 billion for the year, roughly 20% below the initial target. This conservative stance reflects the current market uncertainty and the cautious optimism about near-term recovery in the various sectors Macronix serves, including automotive, communications, medical, and server products.
As Macronix navigates through these challenges and opportunities, its strategic focus on advanced technologies and new market opportunities will be critical in overcoming current adversities and setting the stage for future growth.
