Memory prices beat expectations

NOT-SO-SLOW SEASON: DRAMeXchange said that computer memory chipmakers had underestimated the demand for conventional DDR memory, leading to a shortfall


Wed, May 10, 2006 - Page 11

Computer memory chipmakers hiked contract chip prices further in the first half of this month due to a supply shortage, Taipei-based market researcher DRAMeXchange said yesterday.

A supply shortfall had driven up chip prices in the first quarter, bucking the trend in what is usually a slow season.

Chipmakers, who negotiate with customers, mostly computer vendors, about chip prices twice a month, raised contract prices for conventional DDR (double-data-rate) memory chips by between 3 percent and 5 percent in the first half of this month, DRAMeXchange said.

As most memory chipmakers are boosting their production of second-generation DDR2 chips in anticipation of demand, they have not been able to match demand for DDR chips since last month, it said.

"The demand for DDR chips is still there, although DDR2 is set to overtake DDR as the mainstream computer memory chip," DRAMeXchange said.

Intel Corp, the world's biggest chipmaker, planned for a third of its chipsets to make use of DDR chips in the current quarter, the researcher said.

The contract prices for DDR2, which are 10 percent higher than those for DDR, held steady in the first half of this month, after a rally in excess of 20 percent in the first quarter, according to DRAMeXchange.

Nanya Technology Corp (南亞科技), which has a 6.7 percent share of the global computer memory chip market, said last month that "demand in the second quarter will not be as slow as expected."

Nanya Technology, which supplies chips to computer vendors including Dell Inc, sells 70 percent of its chips on a contract basis. The company raised its contract prices by between 3 percent and 5 percent for the second half of last month compared to the first half, it said.

On the spot market, rising DDR2 demand drove the price for the mainstay DDR2 512MB 533 MHZ chip to rise 0.4 percent to US$5.07 per unit in the past week, according to DRAMeXchange.

Powerchip Semiconductor Corp (力晶半導體), the nation's biggest computer memory chipmaker, said last month that sales hit an all-time high of NT$6.05 billion (US$192.1 million) on improving chip prices and growing output.

Nanya Technology's sales for last month also set a record at NT$5.75 billion.

Shares in Nanya Technology and Powerchip yesterday slid 1.64 percent and 2.1 percent respectively, to NT$21.05 and NT$23.3 on the Taiwan Stock Exchange and the GRETAI Securities Market.