Thu, Jul 18, 2013 - Page 14 News List

DRAM price expected to surge

GOOD TIMES RETURN:A report said the price increase has not come as a complete surprise as there are fewer suppliers in the DRAM market today compared with 2010

By Lisa Wang  /  Staff reporter

The DRAM average selling price is expected to surge 50 percent year-on-year in the current quarter to US$2.53 as demand outpaces supply after some suppliers exited the market in the last slump, IC Insight forecast yesterday.

That will bring DRAM prices back to the levels last seen in the fourth quarter of 2010, before slightly tapering to US$2.52 next quarter, the research house said in a report.

Overall, the average DRAM price is expected to soar 40 percent year-on-year this year, while unit shipments are forecast to fall 8 percent from a year ago, the report said.

The 50 percent price increase in the July-to-September quarter is an extension of a 42 percent year-on-year rise in the second quarter and a 22 percent increase in the first quarter, IC Insight said.

“The increase in DRAM average selling prices has not come as a complete surprise. One factor contributing to rising prices is the fact that fewer suppliers are participating in the DRAM market today compared to 2010,” the report said.

Taiwan’s Powerchip Technology Corp (力晶科技) and ProMOS Technologies Inc (茂德科技) were forced to withdraw from the DRAM market in the wake of large losses, while Japan’s Elipda Memory Inc is in the process of merging with US memorychip giant Micron Technology Inc.

“With little new capacity being added, the supply-demand balance is now favoring DRAM suppliers as demand (particularly for higher-priced mobile DRAM) is beginning to outstrip supply, resulting in upward pressure on prices,” IC Insight said.

Benefiting from the industrial upswing, Taiwanese DRAM suppliers Nanya Technology Corp (南亞科技) and Inotera Memories Inc (華亞科技) have seen their share prices skyrocket 93 percent and 350 percent to NT$4.97 and NT$14.75 respectively this year.

“We feel the price will continue to rise mildly in the third quarter, after a 2.5 percent monthly price increase last month,” Nanya spokesman Lee Pei-ing (李培英) said last week. “Demand for mobile DRAM is quite good.”

Nanya Technology posted its first quarterly profit in 13 quarters in the January-to-March period and it expects profits to increase, as the DRAM price is still on the rise.

IC Insight forecast that the DRAM market would see growth of 28 percent this year from last year after a 25 percent annual decline last year and an 11 percent annual contraction in 2011.

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