Are DRAM chips ready to take a hit?
Prices of DRAM memory chips, as well as the stock of memory-chip maker Micron and the chip-equipment makers, could get whacked in coming weeks as Korean chip makers come off a self-imposed slowdown by flooding the market with product.
The Korea Herald, which is largely overlooked by U.S. investors, reported late last week that Samsung Electronics, Hyundai Electronics and LG Semicon — Korea's big three chip makers — have resumed full production in response to a steady climb in the price of 64-megabit chips. The new supply of chips should hit the market within four weeks, just as the industry goes into a slowdown.
Chip prices rose from around $7.50 in June to roughly $10 Thursday on fears of a shortage, thanks in part to the Korean slowdown. Micron, in fact, has been saying that its chips are on allocation. Rising chip prices also have been a key factor behind the doubling of Micron's stock in the past two months.
With demand and supply coming back into sync, according to the newspaper, the Koreans figured it was time to rev up their fabs, which had been operating only three weeks a month. Merrill Lynch analyst Paul Kim on Thursday warned of falling DRAM prices.
Micron officials couldn't be reached, but one analyst who has talked to the company says its response was that it is sold out for the rest of the year. With more supply coming on-line, one thing seems clear: It won't be sold out for very long.
|
