With expectations of higher spot and contract prices in the third quarter, the US investment bank Morgan Stanley said investors could buy more shares of Taiwan's dynamic random access memory (DRAM) chip makers.
In a report released yesterday, Morgan Stanley suggested investors invest in Nanya Technology Corp (南亞科技), Powerchip Semiconductor Corp (力晶半導體) and Winbond Electronics Corp (華邦電子).
"We expect 256 megabit DRAM spot pricing to reach US$3 soon from about US$2.5 currently on improved seasonal demand," Morgan Stanley analyst Frank Wang (
The DRAM contract prices this month are expected to increase by 3 to 5 percent and the price hike trend should continue next month and in September, Wang said.
The price rebound, combined improved seasonality, would bring Nanya Technology and Winbond Electronics back to profitability in the July-September period from a dull second-quarter performance on weak DRAM prices, the analyst said.
Powerchip Semiconductor rose 2.04 percent to close at NT$25 on the Gretai Securities Market. Nanya Technology and Winbond Electronics shares rose by 1.01 percent and 2.36 percent to NT$25 and NT$13, respectively, on the Taiwan Stock Exchange.
Morgan Stanley raised its price targets for this quarter for Nanya, Powerchip and Winbond to NT$28, NT$27 and NT$14, respectively.
Nanya Technolgy also saw its share price rise on news that it confirmed the construction schedule of its first 12-inch fab.
The company is set to raise capital for the plant next year and begin 90-nanometer production in 2007, the DigiTimes yesterday reported on its Web site, citing the company's president Lien Jih-chang (
In light of DRAM sector's improved prices and positive market sentiments, the Califonia-based research institute iSuppli Corp on Tuesday raised its near-term rating of the sector to "neutral" from "negative," which had been maintained since last December.
Spot prices for 256 megabit DDR DRAM jumped by 4.4 percent last Friday, or 9.1 percent last week, the biggest weekly price surge since April 9 last year, driven by the supply shortage, according to the Taipei-based DRAMeXchange.com.
The spot price for DDR 256Mb 400 MHz rose to an average of US$2.65 per unit, up from US$2.64 the day before, with a daily high hitting US$2.95 per unit yesterday, DRAMeXchange said.
However, the sector's overall performance is not impressive, as iSuppli predicts DRAM revenue to rise to just US$26.5 billion worldwide this year, from US$26.4 billion last year, due to pricing and demand weakness in the first half. It said average selling prices would decline by 34 percent, depressed by a considerable DRAM bit production growth of 52.7 percent this year.
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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