Taiwan's major memory-chip makers continued to suffer losses in the first quarter on sharp falls in chip prices but expect market conditions to improve from the second quarter.

Nanya Technology Corp. (2408.TW), Taiwan's largest maker of dynamic random access memory chips by revenue as of the first quarter, reported Thursday a first-quarter net loss of NT$10.51 billion, or NT$2.25 a share, wider than a net loss of NT$8.78 billion, or NT$1.88 a share, a year earlier.

It is Nanya's eighth consecutive quarterly loss, which is also wider than the average NT$8.1 billion net loss forecast by five analysts polled earlier by Dow Jones Newswires.

Revenue in the first quarter fell 32.5% to NT$6.17 billion from NT$9.14 billion a year earlier, according to the company's monthly filings.

"The demand is recovering, and I think the upward momentum will continue through the third quarter," Nanya Spokesman Pei Lin Pai said.

Economic stimulus measures around the world and China's subsidies for purchases of computers in rural areas will continue spurring demand for DRAM chips that are widely used in personal computers, Pai said.

The company keeps its bit shipment growth forecast of 37% for 2009, slower than a 57% growth last year, Pai said.

Nanya plans to raise contract chip prices by 15%-20% for the first half of May from the latter part of April, when the company increased prices by up to 9% from early April.

With chip prices remaining under cash costs, Nanya and Inotera Memories Inc. (3474.TW) - Nanya's chip affiliate - will focus on advancing their production technology to 50 nanometers starting in the third quarter, making the group the world's second to mass-produce chips using the technology after South Korea's Samsung Electronics Co., said Inotera President Charles Kau.

Yields of chips produced by 50-nanometer technology will be double than those made by the current 75-nanometer technology and thus help the companies to cut unit cost by half, Kau said.

The technology will be used to make 2-gigabit double-data-rate-three (DDR3) chips, which are getting more popular with their higher power efficiency and faster speed compared with the current mainstream DDR2 chips, Kau said.

For the technology migration, Nanya budgets NT$13 billion of capital expenditure for 2009, up from NT$12 billion last year, and plans to issue less than 4 billion shares.

Inotera, a joint venture between Nanya and U.S.-based Micron Technology Inc. (MU), expects its 2009 capital expenditure to be NT$11.7 billion, down from NT$20 billion in 2008, and plans to issue up to 2 billion new common shares to raise NT$20 billion, Kau said.

Inotera expects its bit shipments of memory chips to rise 50% in the second quarter from the previous three months because of improving market conditions, Kau said.

In the first quarter, Inotera's bit shipments fell 51% from the previous quarter, he said.

Inotera said its net loss for the three months ended March 31 widened to NT$5.32 billion, or NT$1.59 a share, from the year-earlier NT$4.18 billion, or NT$1.25 a share.

Revenue in the first quarter fell 28% to NT$6.36 billion from NT$8.8 billion a year earlier.

Meanwhile, Powerchip Semiconductor Corp. (5346.OT), the island's second-largest DRAM maker by revenue, posted a net loss of NT$6.29 billion in the first quarter, also its eighth straight quarterly loss, compared with a net loss of NT$9.74 billion a year earlier.

Powerchip's first-quarter revenue fell 74% to NT$3.92 billion from NT$14.84 billion a year earlier, according to monthly company statements.

-By Jessie Ho, Dow Jones Newswires; 88622 502-2557; jessie.ho@dowjones.com