Improving semiconductor prices yesterday bolstered a rosier economic outlook for South Korea, sending stock prices jumping 4.5 percent to a 16-month high on the first trading day of the new year.
The market gathered upward momentum after news that Hynix Semiconductor Inc raised its January contract prices for memory chips sold to major PC makers by an average 30 percent.
Another South Korean semiconductor giant, Samsung Electronics Co, said it would follow Hynix's lead and seek higher dynamic random access memory (DRAM) contract prices in negotiations with major clients this weekend.
Hynix rose by its maximum daily limit to close up 14.9 percent or 360 won at 2,780 won. Samsung Electronics rose 29,000 won or 10.4 percent to 308,000 won. Other chip-related stocks were also higher, with Anam Semiconductor jumping by its daily limit to close up 15 percent or 850 won at 6,520 won.
"The recovery in DRAM prices is faster than expected and the hikes in semiconductor prices are much greater than the increases in demand for memory chips," said Kim Young-june of Kyobo Securities Co.
The prospect of the world's semiconductor industry consolidating through mergers and acquisitions to ease the global supply glut added to the upswing, he said.
"But I am afraid that the market is now overshooting," he said, noting that the price hikes in semiconductors and their stock prices have yet to be backed by increases in demand for semiconductors among PC makers.
An analyst with Regent Securities said institutional investors were buying aggressively to procure shares amid widespread expectations for an early economic recovery.
"Most institutional investors and foreigners say we will have a good year for the economy and the market as well," he said.
South Korea's November industrial output rose 4.9 percent from a year earlier, reversing a 1.3-percent drop in October and indicating the economic slump may have bottomed out.
In its economic policy report to President Kim Dae-jung last week, the finance and economy ministry forecast economic growth at over four percent this year, up from 2.8 percent projected in 2001.
Many analysts said the index would test 760 points in the first quarter. The index jumped 31.25 points yesterday to close at 724.95.
Hynix said it had raised by 30 percent the price of 128MB DRAM chips provided to IBM, Hewlett-Packard, Compaq and other computer makers.
Samsung and Hynix previously raised prices by 10-20 percent on two occasions last year.
The spot market price of a 128MB DRAM chip stood between US$2.50 and US$2.80, compared with less than US$1 in early November.
At current prices, Hynix is able to cover most of its production costs, although it is still losing money, analysts said.
In the case of Samsung Electronics, a 50 cent rise in 128MB DRAM prices would bring additional income of US$25 million to the company each month.
"Should Samsung Electronics succeed in raising prices that much, it would be able to shift back to the black in DRAM in the January-March period this year, one or two quarters earlier than expected," Kim Yong-june said.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
Taiwan’s exports soared to an all-time high of US$61.8 billion last month, surging 49.7 percent from a year earlier, as the global frenzy for artificial intelligence (AI) applications and new consumer electronics powered shipments of high-tech goods, the Ministry of Finance said yesterday. It was the first time exports had exceeded the US$60 billion mark, fueled by the global boom in AI development that has significantly boosted Taiwanese companies across the international supply chain, Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing. “There is a consensus among major AI players that the upcycle is still in its early stage,”
The Central Weather Administration (CWA) yesterday said it is expected to issue a sea warning for Typhoon Fung-wong this afternoon and a land warning tomorrow. As of 1pm, the storm was about 1,070km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, and was moving west-northwest at 28 to 32kph, according to CWA data. The storm had a radius of 250km, with maximum sustained winds of 173kph and gusts reaching 209kph, the CWA added. The storm is forecast to pass near Luzon in the Philippines before entering the South China Sea and potentially turning northward toward Taiwan, the CWA said. CWA forecaster Chang Chun-yao (張峻堯) said
Japanese Prime Minister Sanae Takaichi yesterday said that China using armed force against Taiwan could constitute a "survival-threatening situation" for Japan, allowing the country to mobilize the Japanese armed forces under its security laws. Takaichi made the remarks during a parliamentary session while responding to a question about whether a "Taiwan contingency" involving a Chinese naval blockade would qualify as a "survival-threatening situation" for Japan, according to a report by Japan’s Asahi Shimbun. "If warships are used and other armed actions are involved, I believe this could constitute a survival-threatening situation," Takaichi was quoted as saying in the report. Under Japan’s security legislation,
RSS