UMC (2303)closed @39.90 -0.10 vol 45,331,400 most active
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September 5 net purchase 6,685,000 shares
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TAIWAN WEIGHTED closed @ 4338.26 -86.65 (-1.96%)
Day's Range :4314.08 - 4412.42
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DRAM LOWER; MARKET CONSOLIDATION SHOULD BE A PLUS
Overall action in the spot DRAM market has been pretty lackluster this week
with prices for 128Mbs SDRAM easing another 4.2% this week from $1.42 to
$1.36. Lower density 64Mbs were down by a smaller margin, closing the week at
$0.69 (-3.2%). Contracts drifted slightly lower as well to $1.45-1.50, down
about 4%. With spot market trading volumes getting lighter towards the end of
the week, many U.S. brokers were more interested in heading out early for the
Labor Day weekend. Their overseas counterparts were reporting a similar
story, though inventory at many brokers is quite lean, as most are unwilling
to hold too many parts for fear of getting stuck with higher cost goods.
The trade press last week was full of news of further consolidation in the
DRAM industry, which we take to be a plus. Toshiba (6502.JP-Y609, 3M) is
reported to be talking to Infineon (IFX-$24, 1H), Samsung (5930.KS-W196,500,
1H), and even Elpida (a DRAM joint venture of Hitachi/NEC) about either a
DRAM partnership or an outright sale of its DRAM operations. Meanwhile,
Winbond (2344.TW-NT$19, 2H), Toshiba's Taiwanese technology licensee, is
putting its $3.5 billion 300-mm plans on hold pending the outcome of its
partner's ongoing discussions. Consolidation should be a positive for the
industry as excess supply is soaked up which, in turn, could lead to firmer
prices.
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