Perhaps this is the result of me buying a new PC this weekend? One person can make a dfference:-)
Spot prices of DRAMs soar in puzzling turnaround
By Jack Robertson and Robin Lamb
EBN
(11/13/01 20:08 p.m. EST)
DRAM spot market prices for mainline PC memory chips have doubled in a week in an astonishing market turn-around that sent analysts and participants scrambling for an explanation.
DRAMExchange.com reported the workhorse 16x8 PC133 128-Mbit SDRAM was selling for an average $1.66 on Monday, up from 85 cents just a week earlier. Converge Inc. listed the same part selling at $1.70.
In fact, the steep spot market jump pushed prices ahead of the last negotiated contract prices, reported by analysts averaging $1.30 for the PC133 128-Mbit part.
The rapid flip-flop caught analysts by surprise. Jonathan Joseph, chip analyst for Salomon Smith Barney, said "it is unclear what really spurred the price move."
Joseph Osha, chip analyst for Merill Lynch Securities believed "Micron Technology and Hynix Semiconductor are testing the waters (for higher prices, but without a seasonal upturn in demand, we believe the recent DRAM price hikes will not stick."
Farhad Tabrizi, Hynix vice president for world wide marketing, has an explanation for the sudden pricing upsurge. "When some of our DRAM competitors thought Hynix would not survive, they dropped the prices abnormally to kill us off. After creditors approved the Hynix financial restructuring package and they saw we weren't going to die, the competitors had to back off quickly on such low pricing they couldn't maintain."
DRAM market analysts in Asia, where the DRAM price hikes are steepest, also believed the three biggest DRAM vendors--Samsung, Micron and Hynix -- had set a floor price of $1.50 or more that would not be cut for 128-Mbit chips sold into the spot market.
Tabrizi said Hynix didn't have to set an floor prices for DRAMs being sold into the spot market, after major competitors stopped severe undercutting to drive his firm out of business. "We were glad to take advantage of the new higher spotmarket prices," he said.
A Samsung spokesman denied either cutting prices deliberately or conversely setting a floor price in the spot market to drive prices up. "The market is reacting to a confluence of factors to move prices up: seasonably higher demand, and a shift to Direct Rambus and DDR lessening the supply of (single data rate) PC100 and PC133 SDRAMs," he said.
He reiterated that Samsung isn't a price leader, but in virtually every DRAM type the Korean firm is among the higher price vendors.
Michael Seibert, memory strategic marketing manager for Micron Technologies, denied that his company would set any spot market floor price. "The market always determines the price that we can sell at."
Elpida Memory and Infineon Technologies didn't responded to inquiries.
Hans Dieter Mackowiak, Samsung Semiconductor senior vice president for sales and marketing, said a week ago he had seen the beginning of the upward DRAM price movement, but added he didn't believe it could be sustained. The Samsung spokesman Tuesday reiterated the forecast that the price jump couldn't be maintained in face of a global supply glut that shows no signs of dissipating any time soon. |
