Chip Makers Raise Prices Again, In a Sign of the Sector's Recovery
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
SEOUL, South Korea -- Two of the world's largest memory-chip makers have raised the prices they charge their biggest customers, a sign that the recovery in the battered sector is gathering pace.
Hynix Semiconductor Inc., the world's third-largest maker of dynamic random access memory chips, has raised 128-megabit chip prices for large clients by 20% to 25% to $4 on average, company spokeswoman Kang In-young said.
Industry officials said the world's largest DRAM producer, Samsung Electronics Co., boosted contract prices on 128 MB chips to an average of $4 earlier this month. The company said it doesn't comment on contract prices.
Separately, Taiwanese DRAM maker Mosel Vitelic Inc. said Wednesday it expects 128 MB chip prices to rise to around $4.50 to $5 in the second half.
A price around $4 per chip means profit for producers. Michael Min, a technology analyst at Korea Investment Trust Management & Securities, said in his Wednesday report that it costs Samsung Electronics slightly more than $3 and Hynix close to $4 to produce a 128 MB chip.
Chip makers world-wide had huge losses last year because chip prices stayed 30% below production costs for most of the second half. But spot DRAM prices have surged fourfold since November on the back of tightened supply after production cuts and an increase in the average memory capacity installed in personal computers.
Spot prices for 128 MB DRAM chips ranged between $3.40 and $4 Wednesday, according to DRAMeXchange.
Samsung and Hynix have been raising contract prices since late December in line with the rise in spot prices. Both have said they have few chips left to sell on the spot market and now supply entirely to contract clients.
"Our clients are 100% contract-based," said one Samsung Electronics official.
Industry sources said Samsung Electronics has been making a profit from its chips since mid-January. Before the hike, Samsung sold its chips at $3.60 to $3.80 to contract buyers.
Analysts said the chip business recovery will likely affect the industry's consolidation.
South Korea's chief financial regulator said Wednesday that Hynix will keep options open while it holds separate alliance talks with Micron Technology Inc. and Infineon Technologies AG.
"We will take a position most favorable for us," Lee Keun-young, chairman of the Financial Supervisory Commission, told reporters.
Updated February 6, 2002 3:56 p.m. EST
online.wsj.com |
