Sat, Aug 23, 2003 - Page 11 News List

Memory-chip prices drop amid report of Hynix sales

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Prices of the most widely used computer-memory chips fell from six-month highs on concern that Hynix Semiconductor Inc is selling more chip stocks in the spot market ahead of tariffs on its exports.

The spot price of the 256-megabit, 266-megahertz double-data-rate dynamic random-access memory chip fell US$0.03 to US$4.53 today, bringing its decline in the past two weeks to 5.2 percent, according to Dramexchange.com, a Taiwan-

based online market for suppliers seeking to sell chips that haven't been shipped under contract to large clients.

Hynix, the world's third-biggest memory-chip maker, faces tariffs in the US and Europe after regulators ruled it received unfair government subsidies.

Nanya Technology Corp (南亞科技) and other Taiwanese makers may petition the government as early as this week for so-called countervailing duties on South Korean imports to prevent Hynix dumping production in Taiwan.

"The real concern is that if Taiwan goes ahead with countervailing duties Hynix will not be a viable company," said Sam Hahn, an analyst at ABN Amro Asia Ltd in Seoul.

That would increase selling by the South Korean chipmaker, he said, adding, "It's a scary prospect."

Hynix spokesman Kim Kwang Sun denied a report in the Commercial Times that the company has been dumping its products in Asian spot markets, causing prices to fall.

The spot price of memory chips has risen from a 12-month low of US$2.86 on Feb. 26.

Of the top 10 makers, only South Korea's Samsung Electronics Co, the world's biggest supplier, reported a profit from selling the personal-computer components in its most recent earnings period.

Hahn forecast that prices will remain stable as producers have been "disciplined" in limiting the amount of new manufacturing capacity they have created.

Hynix may also face tariffs in Japan, where Elpida Memory Inc and other chipmakers plan to ask their government to tax the South Korean company's products, the Nikkei English News reported on Wednesday.

Hynix has said it will get around US tariffs by supplying chips directly to the Asian plants of US companies. By lobbying their governments for tariffs, Asian rivals hope to make Hynix's chips too expensive for component buyers in their countries.

Hynix could face an import tariff of 30 percent to 40 percent in Japan, Nikkei said. Elpida will file its request before the end of the year, the report said.

The US Commerce Department imposed a maximum 44.7 percent tariff on Hynix products last month and the EU imposed a 34.8 percent import tax on Hynix earlier this month.

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