Hyundai Says DRAM Prices May Rise on PC Rebound
9/22/00 3:22:00 AM
Source: Bloomberg News
Taipei, Sept. 22 (Bloomberg) -- Hyundai Electronics Industries Co., the world's No. 2 memory-chipmaker, said spot market prices for dynamic random access memory chips will probably rise by October on increasing demand for personal computers.
Benchmark 64 megabit PC100 DRAMs have fallen 21 percent from $8.36 on Sept. 6 to $6.59 yesterday in spot trading. Shares in memory chipmakers such as Samsung Electronics, the No. 1 DRAM maker, and Hyundai have matched the plunge in spot market prices, falling about 20 percent during the same period.
''Prices should come back up by the end of September or early October,'' said Mario Martinez, Hyundai product marketing director. ''Everyone has been holding their breath.'' He said a rise in prices would be linked to an increase in demand for personal computers.
Demand for DRAM chips is, in turn, a leading indicator for the personal computer industry, where about 80 percent of DRAM production is used.
Martinez said $5 for a 64 megabit DRAM chip is close to the breakeven point for memory makers, but noted this can vary.
Hyundai fell 1,550 won, or 10 percent, to 14,350 won at the close of trading today, in line with the decline in most other chipmaker and computer-related stocks across Asia. The declines came after Intel Corp., the world's largest computer-chip maker, yesterday said third-quarter sales will fall short of forecasts.
False Expectations
Samsung last month said prices for DRAM chips should rise for two years as demand exceeds supply. Instead, spot market prices have stabilized or fallen in the last two weeks.
Still, spot prices for PC100 64 megabit DRAMs may not be as important an indicator for the computer industry as some investors seem to think, according to analysts.
''The weakness in demand is very narrow, involving mostly 8M x 8 PC 100 SDRAMs and the desktop PC market,'' said Victor DeDios, an analyst with DeDios & Associates. ''The market has already shifted to the 128 megabit PC100 and to the 128 megabit PC133.''
The four largest DRAM makers, Samsung, Hyundai, Micron Technology and NEC Corp. have been the main companies boosting production of higher memory-density 128 megabit DRAMs, according to DeDios.
The largest DRAM makers sell about 20 percent of their production on the spot market, with the rest sold on the contract market to top-ranked computer makers.
Martinez and DeDios called the slide in 64 megabit spot market prices an inventory-correction issue. Computer makers have stockpiled DRAM chips in anticipation of rising prices during the second half of this year.
Concerns remain about demand for personal computers during the rest of this year. In addition to Intel, computer makers in Taiwan also noted sales during the second half of this year have not been as strong as expected.
Taiwan computer makers account for over 60 percent of the world's production. |
