Phison optimistic on Q2 demand for NAND flash chips

Pan told local media after a beam-raising ceremony for the company’s new NT$780 million factory in Miaoli that though demand for NAND flash has been slow, the second quarter onwards would see “extremely strong” demand.

He said NAND flash suppliers were now committing to produce higher-capacity 3-D NAND flash, but that slow ramp-up and growing demand for application devices had resulted in artificial demand — driving massive shortages for NAND flash. Pan predicted shortages to peak in the second and third quarters.

Pan said this year’s revenue would rely on the supply-side conditions of NAND flash, but he expressed confidence that the company would remain profitable this year.

“We have already received calls from new clients — suppliers of smartphones, PCs and computer servers. Phison will focus mainly on our existing partners, but we will look out for new partnerships if opportunities arise,” Pan said.

2016 had been a tough year for Phison, he said, but profits nonetheless set a record-high since it was established 17 years ago; last year, the firm generated an annual revenue of NT$43.78 billion — a 17.76 percent increase year-on-year.

Last August, Phison’s shares went into free fall amid allegations that the company had manipulated its financial statements by selling its parent company’s products to subsidiaries to inflate revenues.

Pan admitted the company had “crossed a red line” by skirting accounting rules regulating transactions among its subsidiaries. Pan was questioned by prosecutors before being released on bail of NT$20 million (approximately US$635,829).

According to local media, stock prices plunged dramatically until local tycoon Samuel Yin (尹衍樑) invested NT$2 billion to stop the bleeding.

Phison’s new Miaoli plant was constructed by Ruentex Financial Group, chaired by Samuel Yin, who was a guest of honor at the beam-raising ceremony Friday.

Phison currently has 1,200 employees, and once the new factory launches in the second quarter, it plans to expand its staff up to 2,300 people, said Pan.

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