Memory chip prices notch up big gains on growing demand

The prices of the most popular memory chips used in products as varied as personal computers and digital answering machines rose by 1.6 percent yesterday due to an increased demand from computer manufacturers, a Taiwanese memory-chip trading Web site reported yesterday.

The average price of the benchmark 256-megabit double-date rate dynamic random access memory (DRAM) chip closed at US$3.28 yesterday, up US$0.05 since the market opened at the beginning of the day, Dramexchange.com said.

This was the biggest gain in the price of the most widely used memory chip in personal computers since May 23, when prices rose US$0.09 to close at US$3.15.

"As the second half of the year approaches and DRAM makers look beyond SARS, optimism reigns," the organization said in an e-mail statement.

"Positive second-half forecasts and new quarterly-based volume commitments from PC original equipment manufacturers [OEMs] encourage this optimism," the e-mail said.

"Without pressure to dump inventory early in the month, prices look set to rise this week," it said.

Taiwan computers on a contract or OEM basis for the world's leading brands.

Asia the US are expected to emerge from a SARS-induced tech-buying hibernation first, but Europe will remain slow as corporations prepare for their summer vacations, Dramexchange.com said.

"In Asia and the US, expectations are high that demand delayed by SARS is ready to kick in," the organization said.

"Traders and the channel are anxious to replenish and pre-stock inventory for arbitrage," the organization said.

"Although end-user demand is only just starting to pick up, it's enough to support price rises. Europe, in contrast, is getting ready for its vacation season and the market is sluggish," it said.

Domestic chipmakers have suffered from plummeting prices in the past 12 months as government-funded rivals in South Korea pumped out more of the product than the slumping international computer market needed.

On Tuesday, Nanya Technology Corp (南亞科技), the largest domestic maker of memory chips, said that its sales last month jumped 38 percent to NT$2.2 billion compared to the same month last year on stronger demand from customers.

The sales jump is also 38 percent higher than in April when the company reported NT$1.6 billion in orders filled.

A week ago, Nanya vice president Charles Kau (高啟全) said that the company had cut its inventory levels by about one week from the amount it had in warehouses last month.

The compnay now has two weeks' of inventory in stock instead of the usual three, according to Kau.