Samsung, Memory Chipmakers Shares Rally as DRAM Price Rises
6/1/00 8:51:00 PM
Source: Bloomberg News
Seoul, June 2 (Bloomberg) -- Samsung Electronics Co. and shares of other Asian computer memory chipmakers surged as investors bet a price rise in one their main products indicates strong demand from personal computer makers.
Korea's Samsung Electronics, the world's largest memory chipmaker, rose 6.7 percent, while No. 2 chipmaker Hyundai Electronics Industries Co. gained 3.6 percent. Vanguard International Semiconductor Corp. and Mosel Vitelic Inc., their rivals in Taiwan, added 6.3 percent and 1.8 percent, respectively.
''There's a good degree of supplier optimism out there right now,'' said Douglas Lee, an electronics analyst at Goldman Sachs (Asia) in Hong Kong. He said prices are going up because manufacturers are limiting output, anticipating they can get higher prices when demand picks up.
''The PC market globally, in my view, has not really accelerated yet,'' Lee added. ''It's a little dangerous, but it's a good bet.''
The spot price of the industry-standard 64 megabit 8X8 PC100 dynamic random access memory chip gained 8.8 percent in the last four days. Each unit now fetches over $7, the highest since February.
DRAM chips provide the main memory for computers and are sold by the millions, meaning that small fluctuations in prices can have a large impact on the profitability of manufacturers.
While most manufacturers sell the majority of their products through long-term contracts, the spot price is seen as an indication of demand and can influence contract negotiations.
Korean manufacturers, along with the U.S.'s Micron Technology Inc., dominate the over $20-billion-a year market.
Earlier this week, the World Semiconductor Trade Statistics group, an organization made up of the world's leading chipmakers, forecast DRAM sales will rise 37 percent this year to $28.4 billion. |
