Thu, Dec 19, 2013 - Page 14 News List

Computer memory chip prices rise after Hynix fire affects its supply

By Lisa Wang  /  Staff reporter

The contract price of DRAM chips rose slightly in the first half of this month as the world’s No. 2 computer memory chipmaker, SK Hynix Inc, faced difficulties in quickly restoring production at a fire-damaged plant in China to feed growing market demand, market researcher TrendForce Corp (集邦科技) said in a report issued yesterday.

Snail-pace supply increase from the South Korean firm and increased demand from computer brands during the holiday season in the US, Europe and China have helped PC makers digest their inventory, the Taipei-based market researcher’s DRAM research team DRAMeXchange said.

PC makers reduced their inventories to normal levels of three weeks or four weeks, from as many as six weeks in August, DRAMeXchange said.

The report added that inventory of large PC brands even dropped to below three weeks.

That has prompted the price of mainstream 4GB DRAM modules to climb 3 percent to US$34 per unit in the first two weeks of this month, from US$33 two weeks ago, according to DRAMeXchange.

The price of 2GB DRAM modules also rose 3 percent because of a significant decline in supply, it said.

The price uptick has surpassed market expectation, HSBC Securities’ Seoul-based analyst Ricky Seo said yesterday in a separate report.

HSBC expects the contract price to rise another 3 percent to 5 percent in the second half of this month, because of unresolved yield issues and persisting replenishment demand from PC makers in preparation for the upcoming Lunar New Year shopping season.

That would also bode well for next quarter’s outlook, Seo said, adding that the contract price would decline less than 10 percent sequentially next quarter, supported by inventory buildup demand.

In terms of unit chip price, the contract price of 4G DRAM chips increased to US$4.06 per unit in the first half of this month, while the spot-market price leapt 8.5 percent to US$4.13 per unit, implying further upside for contract prices, DRAMeXchange said.

“The contract price will extend the uptrend in the second half of this month,” DRAMeXchange said, citing the improving supply-and-demand situation.

The uptrend is expected to persist in the short term as SK Hynix would not be able to churn out massive production from its plant in Wuxi, China, due to yield problems, it said.

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