Thu, Nov 25, 2010 - Page 12 News List

DRAM rallies on S Korea woes

DRAM DOLDRUMS:Analysts are expecting DRAM prices to fall by as much as 30 percent this quarter after they fell by 14 percent last month in a failed bid to stimulate demand

By Lisa Wang  /  Staff Reporter

Share prices for the nation’s major PC memory chipmakers suppliers surged in the morning trading session yesterday as North Korea’s attack on a South Korean island on Tuesday fueled a ray of hope that PC makers would allocate more orders to local companies on concerns about supply disruption from South Korean chipmakers.

However, the speculation about a potential suspension of chip -exports from South Korea in the event the tension in the Korean Peninsula escalates only gave a brief lift to Taiwanese chip stocks since no strong indications immediately emerged that this might occur, while the fundamental problem of overcapacity that threatens the survival of local DRAM -makers kept cautious investors on the sidelines.

At the end of Taipei trading, the nation’s two biggest DRAM makers, Powerchip Technology Corp (力晶科技) and Nanya Technology Corp (南亞科技), saw their shares close 0.66 percent and 1.24 percent higher at NT$6.08 and NT$16.2 respectively. By comparison, the benchmark TAIEX closed in negative territory, down 0.38 percent.

Despite share prices jumping earlier in the day on fears of supply disruption, analysts said the bleak outlook for chip consumption would continue to weigh on the DRAM sector this quarter.

“We still believe the downtrend will continue into this quarter since there are no new signs to alter our expectation of lukewarm demand for PCs and other electronics,” said an analyst at Taipei-based research house TrendForce Corp (集邦科技) by telephone, on condition of anonymity.

The spot price for benchmark DRAM fell 0.14 percent to average US$1.45 per unit in afternoon trading after seeing little change in the morning, according to the online price information compiled by TrendForce.

In morning trading, the speculation on reduced DRAM supply from South Korean firms such as Samsung Electronics Co briefly -alleviated a prolonged price decline for DRAM.

Samsung seized more than 40 percent of the global DRAM market by revenue last quarter, with another South Korean firm, Hynix Semiconductor Inc, far behind with about a 21 percent share, according to data from market researcher iSuppli.

TrendForce expected DRAM prices on a contract basis to plunge over 30 percent this quarter after prices tumbled more than 14 percent, the biggest drop in a year, last month to stimulate slack demand, the researcher said, but demand was still in the doldrums, it said.

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