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Taiwan's DRAM makers expect losses this quarter
By Faith Hung
EBN
(02/21/01, 11:43:05 AM EST)
HSINCHU, Taiwan -- Taiwan's DRAM companies are expecting to suffer losses in the first quarter as memory prices extend their slides.
Winbond Electronics Corp., where Toshiba Corp. outsources its DRAM manufacturing, and Mosel Vitelic Inc., said that they're likely to lose money in the March quarter. Also bleeding money is Nanya Technologies Inc., which licenses technology from IBM Corp., analysts said.
These companies' pessimistic expectations come as sluggish demand for PCs drove the spot prices of 128 MB and 64 MB DRAM below their manufacturing costs, some analysts said. What's worse, more pricing pressure will follow since leading players such as Samsung Electronics, Boise, Idaho-based Micron Technology Inc. and rivals in Japan tend to clear inventories around March.
"Most DRAM companies in the world will post losses in the first quarter, given the difficult market situation," said Thomas Chang, a vice president of Hsinchu-based Mosel. "Unfortunately, weíre one of them." He said that Mosel's inventories now stand at three and a half weeks.
Mosel and Winbond forecast their operating losses in that period would hit millions of dollars.
The 128 MB DRAM was recently sold at $4 - $4.30 each, and the mainstream 64 MB chips at $2.1 - $2.5 on the spot market, analysts said. The prices are not enough to cover Taiwan's production costs, which stand at $4.5 and $2.5, respectively, they said.
With no immediate signs of a recovery, Mosel and Winbond are speeding up to diversify their products.
"We're increasing our production of non-DRAM, such as LCD driver IC. We're also planning to make flash memory starting next year," said Hander Chang, spokesman of Winbond.
Winbond, Mosel, Nanya and others on the island represent about one-tenth of the world's DRAM supply, analysts said. |
