Sat, Jan 24, 2009 - Page 11 News List

Qimonda’s insolvency could boost memory prices

By Kevin Chen  /  STAFF REPORTER

German chipmaker Qimonda’s filing for insolvency protection yesterday is likely to help boost the price of mainstream computer memory chips under a lower production environment, a spot market operator for the chips said.

“The spot price of 1GB DDR2 DRAM chips is likely to rebound to between US$1.2 and US$1.5” per unit, Taipei-based DRAMeXchange Technology Inc (集邦科技) said yesterday in a statement.

The chips are widely used in personal computers.

Currently, many manufacturers of dynamic random access memory (DRAM) chips are selling their products at US$0.75 to US$0.88 per unit, according to DRAMeXchange.

Global DRAM makers have ­experienced the worst ever downturn in recent months because of industry oversupply, which has caused prices to drop for two straight years and once declined to a degree that was below the companies’ cash-cost levels in the fourth quarter of last year.

DRAMeXchange said Qimonda had a 12-inch (300mm) monthly capacity of around 60,000 to 70,000 wafers.

By including the 80,000 to 90,000 wafers contributed by its Taiwanese foundry partner, Winbond Electronics Corp (華邦電子), Qimonda’s total capacity of 12-inch wafers could reach up to 160,000 wafers a month, according to DRAMeXchange.

As the German firm will be walking away from this line of business, the worldwide supply of DRAM chips is likely to decrease by nearly 10 percent, DRAMeXchange said in the statement.

DRAMeXchange’s optimistic forecast is based on a monthly average output of 920,000 wafers the world’s major DRAM suppliers can produce in the first quarter. It also presumes that all other DRAM makers will keep the scale of their production cuts unchanged.

Qimonda’s insolvency will have a mixed impact on Taiwanese manufacturers, as the German company began phasing out its DRAM business in October, according to industry insiders.

The impact on Inotera Memories Inc (華亞科技), a former foundry partner to Qimonda, should be limited, as Inotera president Charles Kau (高啟全) said at an investors’ conference on Tuesday that the company would ship half of its chips to US vendor Micron ­Technology Inc, beginning next quarter, after Qimonda stopped taking its orders recently.

Qimonda, the memory-chip unit of Infineon Technologies AG, owned about a 35.6 percent stake in Taoyuan-based Inotera, but sold the stake to Micron late last year.

Winbond, however, is likely to face a revenue decline of between 25 percent and 30 percent following Qimonda’s insolvency, company spokesman Wilson Wen (溫萬壽) told Bloomberg yesterday.

Qimonda’s bankruptcy came after it failed to obtain more rescue funds to keep the company afloat. The company last month secured a 325 million euro (US$450 million) rescue package from its parent company, Infineon Technologies AG, the German state of Saxony and a Portuguese development bank.

ADDITIONAL REPORTING BY LISA WANG

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