Local memory chipmaker Powerchip Technology Corp (力晶科技) said yesterday the recent fall in DRAM prices should remain moderate rather than plunging to the lows caused by cutthroat competition in recent years.
Powerchip chairman Frank Huang (黃崇仁) said price wars in the global DRAM industry have become a thing of the past, saying that producers are able to generate reasonable profits in today’s market.
Huang characterized the recent downward trend in product prices as part of a natural cycle reflecting lower demand from computer makers rather than vicious competition.
Largely affected by the debt problems in Europe, demand for DRAM slowed in the second quarter, pushing prices back down. However, the decline has not been nearly as dramatic as in late 2008 and early last year, when fears emerged that some local producers might go bankrupt.
Huang said that with the sector migrating to advanced production technology, producers are expected to cut costs and be able to withstand the impact of declining prices.
He also expected the DRAM industry to remain stable over the next two to three years, seeing limited volatility.
Huang’s remarks came after Nanya Technology Corp (南亞科技) and Inotera Memories Inc (華亞科技) reported on Wednesday further losses in the second quarter after poor first quarters, citing weakening demand and falling prices.
Nanya Technology posted a net loss of NT$1.02 billion (US$31.7 million) for the quarter, compared with a NT$1.63 billion net loss in the first three months of the year. Inotera reported a NT$1.81 billion net loss for the second quarter, on top of the NT$1.56 billion net loss in the previous quarter.
Minister of Economic Affairs Shih Yen-shiang (施顏祥) said local DRAM companies have emerged from the depths of a global industrial downturn with the help of support from the government, including financial aid for restructuring.
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