Shares of the nation’s major PC memory chipmakers plunged by more than 4 percent this year on growing concern that industry leader Samsung Electronics Co’s record capital expenditures this year could jeopardize an anticipated supply constraint in the second half.
Share prices of Nanya Technology Corp (南亞科技), the nation’s top maker of PC memory chips, or DRAM, tumbled 4.19 percent to NT$25.15, rebounding from a 5.33 percent decline in the middle of trading yesterday.
“People are just terrified by Samsung’s [announcement],” Nanya Technology spokesman Pai Pei-lin (白培霖) said. “We don’t think it will have any impact [on the supply-demand situation] this year, as it will take between one and two years to complete construction of a new factory.”
With a limited increase in new supply, the Taoyuan-based chipmaker expected an explosive growth in company revenues and net profits in the second half of this year, boosted by corporate and consumer demand for PC replacements.
Samsung said on Monday it intends to spend a total of 18 trillion won (US$15.84 billion) in capital spending this year, of which 9 trillion won would be spent on memory business and 5 trillion won on LCD business, the company said in a statement on its Web site.
Shares of the nation’s major DRAM players Powerchip Semiconductor Corp (力晶半導體), ProMOS Technologies Inc (茂德科技) and Intoera Memories Inc (華亞科技), a joint venture between Nanya Technology and US memory giant Micron Technology Inc, dropped 4.73 percent, 5.83 percent and 5.42 percent to close at NT$4.43, NT$1.94 and NT$19.20 respectively.
The benchmark TAIEX was down 0.18 percent yesterday.
Nanya shares were also shaken by reports that the Taiwanese chipmaker would be among the 10 global memory chip companies, including Samsung and Hynix Semiconductor Inc, facing fines totaling US$381 million for price-fixing, with a ruling expected to be announced today following a nearly two-year probe by the Competition Commission, the European anti-trust watchdog.
“We do not have any information about the expected ruling from the EU,” Pai said.
Samsung’s increase in capital spending exacerbated rising concerns that weakening demand could cause a pileup of excess inventory, which sent Taiwan’s LCD panel shares down yesterday.
Chimei Innolux Corp (奇美電子) shares dropped 6.46 percent after the Chinese-language Economic Daily News reported yesterday that the panel maker was cutting prices to clear excess inventory during the slack second quarter.
However, Chimei Innolux, the nation’s biggest LCD panel maker, denied the report and said it had kept inventory at normal levels.
Shares of local rival AU Optronics Corp (友達光電) declined 3.82 percent to close at NT$31.45.
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