Nanya Technology Corp (南亞 科技), Taiwan's biggest maker of computer-memory chips, said it will renegotiate contracts with its customers and expects higher prices.
Nanya Technology makes DDR (double-data rate) memory chips that speed the operation of personal computers using Intel Corp's Pentium 4 processor. The spot price Monday of a 128 megabit DDR chip was US$3.31, according to DRAMeXchange.com, an online marketplace.
"We expect shortages of DDR chips through the end of this year," Nanya Technology vice president Charles Kau (
Demand for DDR chips has surged as Dell Computer and other Nanya customers introduce faster models to try to revive sales amid an industry slump. The newer models all use DDR chips.
Nanya Technology said this month it's raising DDR production to 93 percent of output from 83 percent in August. It may be the only one of five local memory-chip makers to post a profit this year, analysts said.
"We expect September will be the peak for DDR prices," said J.P. Morgan Securities analyst Bhavin Shah, in a research report. "Nanya Tech's top and bottom line has been benefiting from the DDR premium."
DDR chips on the spot market sell for about double the price of standard chips. Samsung Electronics Co and Hynix Semiconductor are also upping production of the chips. Samsung said DDR chips make up 52 percent of its production. Hynix converted 35 percent of its production to DDR chips and is aiming for 70 percent by the end of the year.
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