Inotera Memories Inc (華亞科技), a computer-memory chip venture between Micron Technology Inc and Nanya Technology Corp (南亞科技), predicted that prices would rise in the third quarter because of an increase in demand.
“Prices will trend up further in the third quarter from the second quarter because of back-to-school demand,” president Charles Kau (高啟全) said on Wednesday in Taoyuan, where the company is based.
The price of the benchmark 1-gigabit dynamic random access memory (DRAM) chip reached record lows in December, according to Taipei-based DRAMeXchange Technology Inc, Asia’s biggest spot market for semiconductors. Kau declined to comment on whether the company would raise chip prices, saying it “has no direct access and authority market pricing” as it is a manufacturer for parent companies Micron and Nanya.
Inotera and other chipmakers began to post losses in 2007 after they overestimated the demand that would be created by the release of Microsoft Corp’s Windows Vista operating system.
Makers of memory chips lost a combined US$12.5 billion in the past two years, the most ever, according to Gartner Inc analyst Andrew Norwood in London.
Inotera plans to diversify into non-DRAM chipmaking after next year to reduce its exposure to the “volatile” DRAM business, Kau said.
The company also plans to cut production costs by upgrading facilities for the 50 nanometer process from its current 70 nanometer technology and to raise its average selling price by focusing on making more expensive chips, he said.
The company plans to spend US$1.6 billion over 18 months to complete the technology, Kau said. By the end of next year, Inotera would be making the so-called DDR3 chips using the 50 nanometer process, he said.
Ninety percent of the company’s current output is DDR2 chips, which are priced at US$1.08 each, while the rest are DDR3 semiconductors that sell for US$1.62 each on average, DRAMeXchange said.
“By the end of next year, we will make the most advanced chips with the lowest production costs,” Kau said.
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