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Chip hike not justified: Dramexchange

Computer memory chipmakers failed to raise prices this month as demand did not justify an increase, said Dramexchange Technology Inc, operator of Asia’s largest spot market for the chips.

Chipmakers left prices of the benchmark 512-megabit chip unchanged at US$0.91, only US$0.03 shy of the record low, data available yesterday at Dramexchange showed. The 1-gigabit chip’s price also did not change, the Taipei-based company said.

The glut in the US$31 billion market, which forced chipmakers to scale back production targets, may overshadow plans by semiconductor companies to reverse their record losses.

Elpida Memory Inc last week triggered a rally in computer-memory stocks after it said it planned to raise prices by 20 percent this month.

“It will take more time, at least until the second half of the year, before the cuts have an impact,” said Rick Hsu (徐稦成), semiconductor analyst at Nomura Securities Ltd in Taipei. “In the most bullish scenario, prices will stay flat.”

Hsu estimated that supply currently exceeds demand by about 7 percent and projected sales would not improve in the second quarter as the US economy falters.

Hsu rates Powerchip Semiconductor Corp (力晶半導體), the nation’s largest memory-chip maker, as “neutral” and Nanya Technology Corp (南亞科技), the second-largest, as “reduce.”

The chipmakers expanded capacity in 2006 in anticipation of greater demand spurred by the release of Microsoft Corp’s Windows Vista operating system.
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