Some Good News. I'm hoping ESI can get back into the low 20's.
Regards, Mark
Chip Market Tightens Due To Output Cuts, PC Sales
TOKYO (Reuters) - The computer memory chip market has tightened since mid-October due to production cuts by Japanese and South Korean makers and stronger demand from PC makers, industry officials said.
Inventories of the most advanced 64-megabit dynamic random access memory (DRAM) chips, known as CL2, have fallen to almost nil due to strong sales of Windows 98-installed PCs in the United States and European markets, the officials said.
''The demand for 64 megabit (DRAM) has jumped. As for high- speed synchronous DRAM chips, inventories have been completely erased,'' a Fujitsu official said.
An NEC Corp official said the company had begun negotiating with volume users for a 10-percent hike in the price for 64 megabit DRAMs.
In the spot market, prices for 16 megabit DRAMs have risen by about 50 percent to about $3, said Fujiaki Sato, analyst at Deutsche Bank Group.
As for 64 megabit chips, prices had recovered to $9.50 from $9.00, up from $6.50 in May, he said.
''I'm bullish about the prospect for high-end 64-mega DRAMs, '' Dresdner Kleinwort Benson analyst Hideki Wakabayashi said.
Globally, only four makers will be capable of producing CL2- type 64-mega DRAMs -- Samsung Electronics Co Ltd, Toshiba Corp, NEC Corp (NIPNY - news) and Micron Technology Inc. (MU - news)
Wakabayashi added makers of lower-end 64-mega DRAMs will continue to suffer from global overcapacity.
Some analysts, nevertheless, are doubtful that recent developments mean that the market's negative trend had been significantly altered.
They say the current uptrend will be short-lived in view of prospects of makers boosting production ahead of the year-end Christmas sales season helped by improving production yields. A cloudy U.S. economic outlook also makes sales projections for PCs difficult, they said.
''It's just a temporary phenomenon as we have seen in the past three years,'' said Yoshiharu Izumi, analyst at Warburg Dillon Read.
Takashi Mimura, analyst at Societe Generale, said he expects prices of a 64-mega DRAM to remain flat at around $8 to $9 until the end of this year, but drop to around $6 by next March. |
