DRAM Shortages Easing, But Price Recovery Still Debatable
October 5, 2000 (TAIPEI) -- Information distributors and OEM companies are beginning to replenish their inventory shortfalls, which is good news for Taiwan's DRAM industry.
Further reason to cheer came when a DRAM manufacturer predicted that the spot price of 64Mb DRAMs will bottom out in October, and the contract price for the month will stay above US$7, as long as PC demand holds stable in the fourth quarter.
In late September, the 64Mb DRAM spot price was traded between a low US$5.5 and US$5.8 per unit in the Asian market. However, the price rebounded to the psychological support level of US$6 not long afterwards, and received strong support at that level. According to a manufacturer, the figures show that the oft-predicted glut in the DRAM market had not in fact happened.
Several chipset makers and distributors thought that optimism might be premature, however, saying that the recovery of the DRAM spot price in Hong Kong was strongly related to China's one-week break around the October National Day holiday. They said that it was too early to say that the recovery in the DRAM industry was not simply a flash in the pan. The prospects for the memory chip industry will remain hazy until mid-October, they added.
Despite such differing views of the prospects ahead for the DRAM industry, short-covering has emerged following a dramatic run-down of DRAM surpluses over the past two months. "OEM companies and distributors now only have enough DRAM inventory to supply the market for a fortnight," said a market watcher, basing his prediction on the fact that DRAM transactions were clearly picking up.
Chip makers predicted that the fourth quarter contract price of 64Mb DRAMs would be between US$6.5 and US$7, but prices would then slide back to US$5-US$6 in the coming first quarter, the industry's traditional slack season.
However, increasing DRAM output as manufacturers upgrade their production with the 0.18-micron process is likely to draw concern that the market may be oversupplied, and once again put DRAM prices under heavy pressure. As a result, several manufacturers believe that a recovery in DRAM prices is still far off.
Related story: DIMM Spot Prices See Major Decline
(Commercial Times, Taiwan) |
