Prices of dynamic random access memory (DRAM) chips, which have risen sharply recently because of tight supply and strong demand, could be pushed up further by the deadly quake that hit Taiwan early yesterday, analysts said.
An analyst at Hyundai Securities Co Ltd's Tokyo branch said prices of 64-megabit DRAM chips could rise to about US$20 per unit because of a shortage caused by the power blackout in Taiwan, which has halted production.
On the spot market, prices surged to about US$17 yesterday from recent levels of US$13 to US$15.
An analyst at the Daiwa Institute of Research's Singapore office said Taiwan was "ramping up production for this Christmas and this earthquake is a big blow."
Taiwan accounts for roughly 10 percent of the world's semiconductor production, while South Korea's three largest DRAM makers account for 35 percent.
The Daiwa analyst said that approximately two to four weeks of output would likely be disturbed by the quake.
In Seoul, industry followers generally shrugged off statements by Taiwan's major chipmakers -- Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp -- that the quake had caused no damage to their production lines.
"The exact damage there has not yet been disclosed but chip production lines are very sensitive to tremors and I think this will lead to another rise in chip prices," said Jon Chong Hwa, an analyst at Salomon Smith Barney KEB Securities.
"An electricity outage and a water supply problem are very important to the chipmaking industry and I don't think they can recover from the damage in the short term," said Suh Do-won, an analyst at LG Securities.
"Even without the earthquake, DRAM prices have risen recently on the spot market," said Yuzuru Sato, analyst at Wako Securities Co Ltd in Tokyo.
He also noted that DRAM prices surged during Taiwan's last power outage, an islandwide blackout in late July.
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