Wed, Nov 15, 2006 - Page 11 News List

Memory price hikes slow on Intel supply problems

SAGGING Contract prices for DRAM chips are likely to 'remain flat' for the rest of this month after they began to fall last month, according to a market researcher's report

By Lisa Wang  /  STAFF REPORTER

The price of computer memory chips lost momentum this quarter as price increases slowed for the first time in several quarters, a Taipei-based market researcher said yesterday.

Prices of dynamic random access memory (DRAM) chips began sliding recently on sagging demand due to supply constraints for Intel Corp's central processing units (CPUs), the DRAMeXchange said in its latest report.

The supply crunch drove down the spot price for benchmark DDR2 computer memory chips to US$5.5 per unit last week, and the decline could extend to the contract market, according to DRAMeXchange.

"We expect contract prices ... to remain flat in the second half of November, [compared with the first half]," DRAMeXchange said in a weekly report issued yesterday after the local stock market closed.

The researcher added that recent price hikes began to slow in the middle of last month.

The contract price for DDR2 chips rose slightly by 1.02 percent to US$5.75 in the first half of this month, according to its statistics.

Taiwan's DRAM chip suppliers, led by Nanya Technology Corp (南亞科技), negotiate with computer firms on chip prices twice monthly.

For the fourth quarter, DRAM-eXchange said DRAM prices would remain stable because of a shortage of central processors and an inventory buildup ahead of the Christmas shopping season.

The CPU shortage would slow the growth rate of global motherboard shipments this quarter, DRAMeXchange said, as the quarterly increase would reach as high as 15 percent rather than the previous estimate of 18 percent.

But shares in Taiwan's three major DRAM suppliers, led by Powerchip Semiconductor Corp (力晶半導體), jumped between 4.41 percent and 6.85 percent after industry leader Samsung Electronics Co predicted a strong first-quarter performance next year.

Memory chipmakers around the world are raising funds amid expectations of an increased demand for DRAM chips in light of Microsoft's plan to sell its new Vista operating system to corporate clients this month.

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