Despite a mild recovery in the second quarter that saw losses narrow, computer memory chipmakers worldwide can expect turbulent times ahead, researcher iSuppli Corp said on Friday.
“The global DRAM [dynamic random access memory] market is showing renewed signs of weakness, with prices expected to fall during the third quarter due to bloated inventories,” the El Segundo, California-based researcher said in a report on its Web site.
ISuppli recently upgraded its near-term outlook for DRAM suppliers to “neutral” from its April 25 ranking of “negative.” But in its latest report, the researcher forecast contract prices for DRAM chips would decline this month and next, as oversupply and weak demand persist.
“The main question now facing the industry is how much prices will decline during the third quarter. We believe it will be over 10 percent from current level,” Kim Nam-hyung, director and chief analyst for memory chips and storage systems at iSuppli, wrote in the report.
ISuppli’s forecast was bad news for major DRAM suppliers such as Samsung Electronics Co, Hynix Semiconductor Inc and Taiwanese rivals such as Powerchip Semiconductor Corp (力晶半導體), at a time when some saw better profitability in the second quarter and others announced they would trim capital spending to stem a supply glut.
Moody’s Investors Service said in a statement last Monday: “A meaningful recovery in the near term is uncertain, especially given the current divergence in spot and contracted memory prices.”
Moody’s warning ran counter to conventional wisdom that falling memory prices should stabilize on the back of anticipated strong PC shipments for the back-to-school season and industry-wide reductions in capital spending.
Moody’s and iSuppli were not alone in painting a negative outlook for the DRAM sector. Market researcher DRAMeXchange Technology Inc (集邦科技) said last week that contract prices were expected to decline by 3 percent to 5 percent this month from last month with no immediate recovery in sight.
“While some industry players are expecting demand to recover in September, a meaningful rebound is unlikely as Powerchip and Rexchip Electronics Corp (瑞晶), which are migrating to 65 nanometer [technology] may increase overall DRAM supply again if their yields gain maturity soon,” the Taipei-based researcher said in a report published on Tuesday.
Rexchip is Powerchip’s joint venture with its Japanese foundry partner Elpida Memory Inc. Elpida’s announcement last week that it would increase capital spending budgets in a bid to gain market share from its closest rival, Hynix of South Korea, likely increased sector risks, iSuppli said.
On Thursday, Elpida said it would raise capital spending 20 percent to ¥120 billion (US$1.1 billion) this year from ¥100 billion projected on April 25, to boost capacity at Rexchip in Taichung and upgrade technology at its Hiroshima plant.
“The market share battle between Hynix and Elpida could delay the market recovery,” Kim said. “Elpida clearly wants to be No. 2 soon while Hynix will try to reduce its NAND [flash memory] growth and to increase DRAM production to retain its market share.”
Hynix is the world’s second-largest DRAM supplier with a market share of 19.5 percent in the second quarter, followed by Elpida, with 15.4 percent. Samsung remained the industry leader with 30.3 percent of the market for the quarter, iSuppli data showed.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS