Asia DRAM Report: Prices Firm On Signs Supply Shrinking
By Dermot Doherty
OF DOW JONES NEWSWIRES
Monday April 16
TAIPEI (Dow Jones)--Signs that output of standard dynamic random access memory (DRAM) chips may be easing have helped buoy spot prices in Asia over the past week.
Some semiconductor industry experts say glitches in upgrading to next-generation technology caused a recent contraction in supply from some chipmakers.
Others, though, say more capacity being set aside for high-performance DRAM products such as Rambus and Double-Data Rate (DDR) was a bigger catalyst for firmer spot prices.
"The segmentation of the DRAM market is lowering supply of synchronous DRAM," said Robert Lin, semiconductor analyst at investment research company Capital-Insight Pacific. "When chipmakers increase supply of DDR, it's coming at the expense of synchronous DRAM."
That ramping-up of DDR output has been reflected in a recent easing of the spot price of the high-performance chip, with a 128MB DDR chip slipping to US$8.00-US$9.00 from US$10.00 last month, Lin noted.
Standard 128MB chips, meanwhile, have risen to US$4.80 from US$4.60 apiece in recent days, though the spot price of a 64MB chip has slipped to US$2.30 from US$2.40.
In the rumor-driven DRAM channels in Taiwan, the consensus seems to be that problems - or speculation about problems - in the migration to next-generation process technology have been a bigger factor in the recent rebound in 128MB chip prices.
"There's been little change in demand, but what we are seeing is a reduction on the supply side," said one executive at a DRAM dealership in Taiwan.
"Some chipmakers seem to be having problems with their yields as they upgrade to 0.17 micron technology and that's caused a tightening of supply."
In Taiwan, both Nanya Technology Corp. (Q.NYT) and Winbond Electronics Corp. (Q.WBE) denied having any yield problems.
However, last Friday, ProMOS Technologies Inc. told Dow Jones Newswires it had lost around 10% of its output in the second half of February and first half of March due to problems with lithography tools during the migration to 0.17 micron technology, as well as a power cut and problems with cleaning tools.
Still, the company - a joint venture between German chip giant Infineon Technologies AG. and Taiwan's Mosel Vitelic Inc. (Q.MVT) - also said all such glitches have since been ironed out and output in April will return to normal levels.
More DRAM Price Weakness Likely In Coming Weeks
Taiwan companies lag far behind chip giants such as Micron Technology Inc. (MU) and Samsung Electronics Co. (Q.SSE) in terms of overall DRAM output.
However, having digested much of their bloated inventories, big-name chipmakers are no longer as active in the spot market as they were earlier this year, making Taiwan chipmakers a key source of current supply into the spot market, dealers said.
Analysts estimate Taiwan DRAM makers now account for between 30% and 50% of the spot market in Asia.
Most industry experts agree upon one thing, though: there are no signs of a sharp pick-up in demand for PCs, which consume the bulk of all DRAM chips.
That - along with seasonal slackness - could trigger further weakness in DRAM pricing in coming weeks, particularly if the uptick has been due to temporary yield problems and output starts to rise again, or if the rebound in prices has been caused by speculative buying.
"Speculative inventory is going to be released (back) into the market and that will come back to haunt spot market players," said Andrew Norwood, senior analyst with Gartner Dataquest's worldwide semiconductor group.
"The day to start rejoicing is when you see more PCs flying off the shelves and at the moment I don't see that happening." |
