Nope, I use Waterhouse. ;^) [just kidding]
Another interesting story...
November 5, 1999
Taiwan: DRAM Pricing Up On Strong Demand, High Contracts
By DERMOT DOHERTY
TAIPEI -- Strong downstream demand and high contract prices will provide firm support for dynamic random access memory chip spot pricing over the coming week, semiconductor industry experts said on Friday.
Eight-inch 64 megabit DRAM chips, the industry standard, are currently trading around US$12.00 per chip in Taiwan, compared with US$11.20 a week previously, dealers said.
"Contract prices are all around the US$10-US$10.50 level and a 20% premium is reasonable," said Jerry Huang, an electronics analyst at Jardine Fleming Taiwan. "Downstream shipments have recovered from the effects of the earthquake. If you look at many downstream manufacturers, October sales were a record high and that's keeping DRAM demand pretty strong."
Personal computer consumption tends to peak during the fourth quarter because of pre-Christmas sales.
DRAM prices had come off recent highs of as much as US$21 in the wake of September's earthquake as motherboard shipments slipped amid shortages of other components caused from quake-induced power outages.
Industry experts said the components shortages have eased and shipments of motherboards, onto which DRAM chips are mounted, are returning to normal levels.
And while there are signs that corporate PC sales in the U.S. are slackening because of the Y2K factor, analysts said strong sales in other markets will prop up DRAM pricing.
"Corporate PC sales in the U.S. are a little slow, but in Asia you saw about 20% growth in Q3," said Jardine Fleming's Huang.
Strong motherboard demand from Europe is also expected to translate into healthy PC sales in that region, he added.
That view was shared by local DRAM vendors.
"For a month European systems makers had been relying on their inventory," said one official at a local DRAM vendor. "But about a week and a half ago, they started putting orders through again and that has helped demand."
Analysts warned DRAM prices will likely slip slightly during the last two weeks of December as companies reduce PC purchases amid concerns over Y2K glitches.
Despite those concerns, DRAM spot prices are unlikely to dip below US$8.50, they added. Most companies break even at around US$5-US$6.
Taiwan is the world's fourth-largest producer of semiconductors, and the island's DRAM spot market is one of the biggest in Asia.
- By Dermot Doherty
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