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DRAM prices expected to rise with demand in Q4

The price of dynamic random access memory (DRAM) is predicted to achieve single-digit growth in the second half of the year from the first half, driven by the year's end peak season and the clearance of supplies, analysts and manufacturers said yesterday.

"Local DRAM makers will be able to achieve better margins in the second half over the first half," said Liu Szu-liang (劉思良), an analyst at Yuanta Core Pacific Capital Management Co (元大京華投顧).

Liu said the average selling prices [ASP] of DRAM in the third quarter is projected to grow 10 percent over the second quarter, and with an increase of 8 percent in the fourth quarter compared to the third due to the declining costs and clearing of supplies.

However, he said that the lack of Intel chipset availability in the market has slowed PC shipments, which will indirectly affect DRAM orders.

Meanwhile, local computer-memory chipmakers also seem upbeat about DRAM prospects.

"The demand will pick up in the second half, boosted by the traditional PC sector peak season at the end of the year," said Eric Tang (譚仲民), spokesman for Powerchip Semiconductor Corp (力晶半導體), the nation's largest memory chipmaker.

With increased capacity, he expects pricing will remain stable over the next few months, estimating the ASP of 256 megabit DDR1 DRAM in the second half will reach between US$2.7 to US$3.

This figure is stronger than the US$2.2 to US$2.4 reported in the second quarter, but weaker than the US$4 to US$5 over the same period of last year.

Tang said his company's third-quarter shipments will post single-digit growth over the second quarter, and an increase of more than 70 percent over the same period from a year ago.

The pick-up will also benefit Nanya Technology Corp (南亞科技), Powerchip's smaller rival, as its vice president Pai Pei-lin (白培霖) said the stronger-than-expected demands from PC makers will push up DRAM pricing and shipments in the third quarter from the second.

Share prices of DRAM makers, however, do not reflect the expected recovery. Nanya shares closed 3.8 percent lower at NT$21.55 on the Taiwan Stock Exchange yesterday, after falling 3 percent on Tuesday. Powerchip lost NT$0.90 to close at NT$21.10, and ProMos Technologies Inc (茂德科技) fell NT$0.65 to NT$11.30.
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