(Yicai) July 15 -- Shares of Tianma Microelectronics and Visionox Technology plunged after the two leading Chinese small panel suppliers predicted losses in the first half of the year, mainly because surging memory prices dragged down smartphone sales.

Tianma [SHE: 000050] closed 5.22 percent down at CNY6.72 (99 US cents) in Shenzhen today. Visionox [SHE: 002387] fell by the 10 percent exchange-imposed daily trading limit to CNY6.70.

Tianma expects a loss of CNY720 million to CNY750 million (USD106.4 million to USD110.8 million) in the six months ended June 30, compared with a net profit of CNY105.9 million a year earlier, the Shenzhen-based company said yesterday.

Suzhou-based Visionox yesterday projected its first-half net loss to have expanded 32 percent to 86 percent to between CNY1.4 billion and CNY2 billion (USD206.8 million and USD295.5 million) from the same period last year.

Memory chips have been in short supply since the explosive growth in demand from the artificial intelligence industry, and their supply has been tight, Visionox noted, adding that this affected the downstream intelligent terminal market and, in turn, the organic light-emitting diode display sector.

Tianma attributed the loss to the same reason as Visionox and added that the increase in memory prices has a particularly prominent impact on its active-matrix OLED business. The in-vehicle and professional display businesses contributed over 55 percent to the company’s revenue and achieved steady profitability growth in the first half, offsetting some impact, Tianma noted.

Smartphone manufacturers have generally chosen to raise prices or adjust product configurations to cope with the rising memory prices, which suppressed consumers’ willingness to buy, according to a report released by International Data Corporation yesterday.

China’s smartphone shipments fell 4 percent to 66 million units in the second quarter from a year earlier, marking the fifth straight quarter of decline, IDC data showed. Meanwhile, global smartphone shipments dropped 7 percent to 277.5 million units in the period, down for the second quarter in a row.

Unlike small panel manufacturers, large panel makers in China forecast impressive performances for the first half. Industry leader BOE Technology Group said recently it expects its net profit to have jumped 54 percent to 69 percent to between CNY5 billion and CNY5.5 billion in the period from a year earlier.

Editors: Dou Shicong, Futura Costaglione