Asian PC-related companies send mixed messages

The biggest losers so far this year: memory-chip makers. The producers of dynamic random-access memory chips, the main memory in personal computers and other consumer electronics, are among the worst performers of the region's chipmakers.

The shares of Hynix Semiconductor Inc, the world's third-largest memory-chip maker, have declined 89 percent this year.

Taiwanese DRAM maker Mosel Vitelic Inc (茂矽) has dropped 45 percent. Memory-chip prices have plummeted about 44 percent since their peak of US$4.36 in March. Most of the world's memory chips are made in Asia and last year's drop in chip prices to below the cost of production resulted in losses at many of the region's chipmakers. While prices have recovered to about US$2.45 from a low of US$2 in May, few see a recovery gaining strength.

"Losses in the memory business are unbearable," said Takehiko Mannami, a senior executive vice president for Mitsubishi Electric Corp, which competes with rivals such as Samsung Electronics Co and Taiwan's Nanya Technology Corp (南亞科技).

Nanya said last week that it may have a loss in the second quarter if chip prices keep falling.

Some semiconductor companies that don't make memory chips say demand is returning this year. TSMC, which provides made-to-order chips for companies such as Nvidia Corp, said it will use 80 percent of its chip-making equipment in the second quarter, compared with 50 percent in the fourth quarter.

As executives and investors puzzle through the mixed messages, some are pushing back their forecasts for a return to sustained growth.

"The big question is: what year is the fourth quarter turnaround coming in?" said Larry Holmberg, a senior-vice president with Agilent Technologies Inc, which manufactures testing equipment in Singapore.

His prediction: 2003.