Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (48203)	9/13/1999 1:36:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 53903

ANALYSIS-Price surge cheers Asian chip makers Reuters, Saturday, September 11, 1999 at 22:36 By Yoo Choon-sik SEOUL, Sept 12 (Reuters) - Asia's major computer chip makers are optimistic that the highly cyclical semiconductor market has made a solid turn up, with a recent surge in global dynamic random access memory (DRAM) prices raising hopes. Analysts in Seoul, Tokyo and Taipei attributed strong DRAM prices to a supply shortage created by robust personal computer sales after years of belt-tightening by the world's major chip makers. "PC demand is growing at a rate that far surpasses expectations while chip makers had frozen spending on capacity expansion. The situation will remain much the same for a while," said Shim Yong-jae, an analyst at SG Securities in Seoul. The current mainstay 64-megabit DRAMs were trading at $13 per unit in international spot markets this week, a sharp rise from $4 two months ago, analysts said. But company officials said prices dipped to the year's low of $5-$6 in May-June. "In the past two years, except for Samsung Electronics Co (KOREA:05930) and Nanya Technology, no DRAM makers in the world had built new plants," said Kao Chi-chuan, vice president of Nanya Technology, a unit of Nan Ya Plastics (TW:1303). "Many DRAM makers had retreated from the market, resulting in a further reduction in DRAM chip supply," Kao said. A nearly worldwide wave of "free PC" offers to people signing up for Internet access and low-priced PCs selling for half the usual price was boosting PC sales, which are now estimated to grow by more than 20 percent this year, analysts said. STRONG DRAM PRICES SEEN LASTING Several analysts said companies which had retreated from the crowded DRAM sector might be tempted by the strong prices to return, but the consensus was that such a move was unlikely as non-DRAM semiconductor sectors were also booming. Deutsche Morgan Grenfell's Fumiaki Sato and Warburg Dillon Read's Yoshiharu Izumi, both in Tokyo, said Japanese makers were unlikely to expand DRAM production or change their strategy of shifting focus to more expensive integrated chips. The chief executive officer of South Korea's Samsung, the largest DRAM maker in the world, said he believed the strong prices would continue for the next two years. "I think there will be no sharp price drop until (the end of) 2001 because of limits in expanding supply before early 2002," Samsung president Lee Yoon-woo said in a statement. Analysts said companies would be limited in their ability to sharply expand their supply in a short period, although the shortage could ease slightly over the coming months in line with improving productivity. "The supply shortage took place when upgraded production lines at major companies were not fully paying off and turning out more output," said Jon Chong-hwa, an analyst at Salomon Smith Barney KEB Securities in Seoul. "I think these upgraded lines will begin fully operating and there will be some output growth by each company from next year even without construction of additional plants," Jon said. Analysts and company officials said the 64-megabit DRAM price was likely to remain stable at a $10-$12 range through the end of this year before easing slightly next year. The surprise increase in DRAM prices cheered stock markets in South Korea and Taiwan last week, although the Japanese market was largely preoccupied with domestic issues. YTD PCT SHR P/E ESTIMATES EPS ESTIMATES PRICE CHANGE END-99 END-00 1999 2000 Samsung 206.27 (69.00) 45.21 24.06 4.42 8.30 Hyundai 85.26 (69.00) 399.37 36.42 0.09 0.93 NEC 84.71 (38.70) 7/8 7/8 0.06 0.34 Toshiba 33.88 (38.70) 7/8 7/8 0.06 0.16 TSMC 139.94 (25.03) 49.11 35.24 0.09 0.12 United 128.29 (25.03) 76.92 40.00 0.03 0.06 Full names are Samsung Electronics Co, Hyundai Electronics Industries Co (KOREA:00660), NEC Corp (TOKYO:6701), Toshiba Corp (TOKYO:6502), Taiwan Semiconductor Manufacturing Corp (TW:2330) and United Microelectronics Corp (TW:2303). Year-to-date percentage changes of respective stock markets in parentheses. Earnings per share in US$ with conversion rates of 1,191 won, 110 yen, T$31.8 per US$. Sources: Reuters Securities 3000, Barra, IBES International seoul.newsroom@reuters.com)) (With reporting by Yuko Inoue in Tokyo, Lawrence Chung in Taipei) Copyright 1999, Reuters News Service dailynews.yahoo.com