NOR flash supply will continue to be tight in the next 12-18 months, according to Miin Wu, chairman and CEO of Macronix International. The biggest problem now is how to immediately create enough capacity, Wu indicated.

Prices for NOR flash chips have risen to reflect tight supply in the second quarter, said Wu, adding that he is also optimistic about end-market demand in the third quarter. The market's outlook for the fourth quarter will still depend on holiday season sales, but conditions are likely to remain favorable until the middle of 2011, Wu commented.

Macronix saw its gross margin reach 47% in the first quarter of 2010, the highest quarterly level in eight years. The company attributed the impressive result to its higher ASPs and lowered costs. Gross margin for the second quarter is estimated at 47-48%, according to the company.

Wu said the company's 0.11-micron process is expected to account for 50-60% of its total revenues generated from NOR flash products in the second half of 2010, and it will move to migrate to 75nm. Macronix' current mainstream process for NOR flash production is 0.13-micron, which made up about 42% of its total NOR flash sales in the first quarter.

Wu also indicated that shipments of Macronix' ROM products in 2010 will be boosted by the release of a new 3D-enabled handheld gaming console from the company's major customer.

Macronix has been a key memory supplier for Nintendo's game consoles.

Macronix recently acquired one of ProMOS Technologies' 12-inch fabs, and revealed plans to invest up to NT$20 billion in the fab over the next two years. The newly-added plant is scheduled to come online with monthly production of 10,000 wafer starts in the first quarter of 2011, according to Macronix, adding that it aims to double the monthly output to 20,000.