Mon, Oct 16, 2017 - Page 16 News List

DRAM stocks soar as demand meets scarcity

MISMATCH:While demand for DRAM was expected to rise 20.6% next year, chipmakers were only planning to add 19.6 percent in capacity globally, a TrendForce report said

By Lisa Wang  /  Staff reporter

Major DRAM companies’ stock prices rallied last week, encouraged by rosy prospects for mobile DRAM chips this and next quarter due to seasonal demand and supply scarcity.

Nanya Technology Corp (南亞科技), the nation’s biggest DRAM chipmaker, saw its stock price rise 2.71 percent to close at NT$87.1 on Friday, up from NT$84.8 the prior week, extending its strong price performance in recent months amid supply-demand imbalance.

Shares of Macronix International Co (旺宏電子) and Winbond Electronics Corp (華邦電子) also surged 18.69 percent and 6.89 percent to NT$59.7 and NT$28.7 respectively, Taiwan Stock Exchange data showed.

Nanya was the world’s No. 4 mobile DRAM supplier by revenue in the second quarter, while Winbond grabbed the fifth spot, according to data compiled by TrendForce Corp (集邦科技).

In a report issued on Thursday, TrendForce said that prices for mobile DRAM chips this quarter would climb by 10 to 15 percent quarter-on-quarter, as handset makers are increasing memory space to cope with higher requirements for improved displays and cameras.

“Price hikes for mobile DRAM in the fourth quarter will be the largest compared with the increases for DRAM used in other applications,” TrendForce said.

The Taipei-based researcher attributed the price hikes to rising seasonal demand and major global DRAM manufacturers’ plan to only slowly expand capacity.

Major chipmakers plan to increase output at a much slower pace, as their output growth will come primarily from technological upgrades rather than new factories, TrendForce said.

As demand growth is expected to continue outpacing supply growth next quarter, TrendForce said there was slim chance prices would fall.

“Concerns about tight supply might subside in the first quarter next year, compared with the fourth quarter, but the headwind will not be strong enough to reverse the uptrend in DRAM prices,” TrendForce said. “Prices are underpinned by growing demand from low-to-mid-range smartphones.”

Undersupply of all DRAM types will continue next year, as chipmakers are expected to grow their output by 19.6 percent annually — the slowest increase in several years, it said.

Samsung Electronics Co and HK Hynix Inc, the world’s two largest DRAM suppliers, would only ramp up production at their new plants in 2019 at the earliest, it added.

Market demand next year is forecast to increase 20.6 percent from this year, driven by memory chips used in smartphones and by new data storage capacity from Google, Facebook Inc and Amazon.com Inc, TrendForce said.

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