Monthly DRAM Watch (February)
More and more clouds are looming above the market for DRAM chips. In contrast to the growing expectations among many memory- board makers for higher prices in reaction to last year's decline, semiconductor makers still fear the market has yet to hit bottom.
January prices for large-lot users rose for the first time in nine months with market barometer 16-megabit DRAMs at about 400 yen, up 30 yen (8%) from December. But spot prices for 16M chips in the middle of February are down about 7% from two weeks ago due to the slow pace of sales growth for personal computers.
Against this background, Melco Inc. has decided to sign one-year contracts to purchase memory from five chipmakers, effective from April. While it previously procured DRAMs mostly on the spot market, the Nagoya-based maker of peripherals opted for long-term contracts because DRAM supplies are projected to tighten and prices to rise.
Actually, chipmakers are promoting a shift to 64M devices. Toshiba Corp. has decided to discontinue production of 16M chips in April 1999. It is possible 16M memory will be in short supply by the end of this year, says Satoru Rick Oyama, senior analyst at ABN Amro Securities (Japan) Ltd.
Intel Corp. will release its 440BX (tentative designation) chipset this spring. With demand for 64M synchronous DRAMs expected to be heavy from next summer, there could well be a shortage of the memories the chipset requires.
In any case, personal computer demand is the key to prospects for DRAM makers. Should sales pick up, backed by this summer's scheduled release of Windows 98, chip prices should rise because the amount of system memory installed in computers is steadily growing. |
