Shares Of Micron Technology Buoyed By Hopes Of Higher Chip Prices
By Christopher Grimes, Staff Reporter
NEW YORK -(Dow Jones)- Shares of Micron Technology Inc. rose 10%
Monday on optimism that prices for memory chips are continuing to rise.
The company's shares (MU) rose $4.375 to close at $47.375 on volume
of 5.4 million.
Scott Randall, an analyst at SoundView Technology Group, said that
makers of dynamic random-access memory chips, or DRAMs, are "poised to
implement a new price increase" in the next 10 days or so. If DRAM
makers can make the price increase stick, it will come just as the
personal-computer industry begins the seasonally strong Christmas
period, he said.
"If they can get this increase to take across the majority of PC
(companies), it's a reasonably bullish sign," Randall said.
Julie Nash, a Micron spokeswoman, said the company doesn't forecast
what will happen with contract prices for DRAMS, but she did say that
prices for DRAMs have stabilized over the last two months.
"DRAM trading is healthy, and prices continue to be stable," she
said. "We've seen somewhat of an upward trend over the past two months."
SoundView's Randall said Micron's prices for 64-megabit DRAMs could
move up about 5%, from the high $8 to low $9 range, by early December.
Right now, prices for those chips are between $8.50 and $9.
DRAM chips suffered a steep two-year decline as chipmakers world-wide
produced more than the PC industry could absorb. Just over two months
ago, however, prices for the commodity-like chips stabilized after
several manufacturers exited the business or idled plants.
Randall cautioned that some Korean DRAM manufacturers are beginning
to increase production, which could unleash more chips on the market
just after the Christmas rush begins to fade. Typically, the first
quarter isn't as good for PC makers as the fourth quarter.
"We're all sitting at end of our seats to see if (DRAM prices)
retrench," Randall said. "If they don't, 1999 could be a good year for
these guys." |
