Elpida Memory Turns to First-Quarter Profit on Computer, Smartphone Demand

Elpida Memory Inc., Japan’s sole maker of computer-memory chips, swung to a first-quarter profit on demand from computers, smartphones and digital televisions.

Net income for the three months ended June 30 was 30.7 billion yen ($352 million), compared with a 44.4 billion yen loss a year earlier, the Tokyo-based company said in a statement today. The average of five analyst estimates compiled by Bloomberg was for a profit of 28.1 billion yen.

Elpida and bigger rival Samsung Electronics Co., Asia’s biggest maker of semiconductors, are benefiting from a revival in demand for chips used in personal computers. Global sales of chips that temporarily store data will climb 40 percent to $31.9 billion this year, researcher ISuppli Corp. said in February. Elpida said today chip prices were “generally at high levels.”

The price of the benchmark 1-gigabit DRAM chip has fallen about 20 percent since Samsung said May 17 it would spend $9.2 billion expanding production capacity for DRAM and other chips this year, raising concern that supply of the components, which trade like commodities, may exceed demand.

Sales more than doubled to 176.3 billion yen from a year earlier, while operating profit was at 44.4 billion yen, compared with a 42.3 billion yen loss a year earlier, the company said.

Prices of Elpida chips rose 78 percent in the quarter from a year earlier, and gained 9 percent from the previous three months, the company said.

Elpida rose 1.2 percent to close at 1,359 yen on the Tokyo Stock Exchange prior to the announcement. The benchmark Nikkei 225 Stock Average dropped 0.6 percent. Shares of the chipmaker have risen 9.8 percent this year.

To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net

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