Prices of the most widely produced computer-memory chips may end week-long gains as personal-computer makers complete restocking components after filling year-end shopping season orders.
The spot price of the 256mb, 266MHz double-data-rate chip, rose 0.5 percent Tuesday to US$6.45, bringing its gains in the last seven days to 2.5 percent, according to Taiwan-based online semiconductor-trading site dramexchange.com.
"DDR 266MHz product line prices are looking downward because mass demand wanes and supply increases," the exchange said in its weekly market outlook. The majority of the chips, which are produced in the millions per month, are sold through long-term contracts, which companies typically don't disclose.
Dramexchange forecasts contract prices for the 256 DDR chip will fall to between US$7.25 and US$6.50 in the coming week, down from last week's level of US$7.50 to US$6.65.
Chip prices normally peak at the end of the third and fourth quarters as personal-computer makers place orders in preparation for their peak sales season, which comes during the end-of-year holidays. Chip prices usually fall at the beginning of the year.
Companies such as Micron Technology Inc, the world's second-largest computer memory-chip maker, are trying to shift their production from older synchronous dynamic random-access memory chips to DDR chips, which accept and send data at twice the speed.
Personal-computer makers are demanding upgrades in the performance of components as they try to persuade consumers they need to trade up to new models.
Micron's head of sales and marketing, Mike Sadler, told analysts on a conference call Tuesday that he expects the premium DDR chips sell for compared with SDRAM to narrow in the coming quarter.
The comment came as Micron, the US's sole DRAM maker, said it had a wider first-quarter loss on lower-than-expected sales because prices fell. The stock dropped as much as 10 percent.
Micron's net loss rose to US$315.9 million, or 52 cents a share, in the quarter ended Nov. 28, from US$265.9 million, or 44 cents, a year earlier. Sales rose 62 percent to US$685.1 million. It was Micron's eighth quarterly loss in a row.
Like rivals Infineon Technologies AG and Hynix Semiconductor Inc, Micron has been slower than Samsung Electronics Co, the only profitable maker of memory chips, to shift production to the faster chips. As a result, Samsung has received higher prices for DDR chips while its smaller rivals suffered a second year of oversupply of the older types of DRAM.
Worldwide sales of dynamic random-access memory chips will probably rise 37 percent this year as demand for personal computers and semiconductors stabilized, Gartner Inc's Dataquest unit said.
Sales of DRAM chips, the main memory in PCs, will rise to about US$16.2 billion this year, from US$11.86 billion in 2001.
Samsung is expected to extend its No. 1 position, boosting its market share to 30.8 percent from 27 percent. Micron's market share will slip to 17.2 percent from 19.1 percent. Hynix will fall to 13 percent from 14.5 percent in 2001.
DRAM chips provide the main memory in personal computers, workstations and servers, where they act as temporary storage for data.
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