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.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (38806)	10/26/2000 9:36:20 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

DRAM Chip Spot Prices Likely to Recover in Early 2001 October 26, 2000 (TAIPEI) -- Suffering from the recent fall in the price of DRAM microchips, global chip makers have decided to go with the tide by postponing their 12-in. fab expansion. Nevertheless, recovery for the DRAM industry appears to be just around the corner, an observer said, as stockpiles of chips begin to run down. A widespread rumor that several chip giants are trying to concert a further fall in the DRAM spot price also suggests that a new wave of demand will appear soon. With shipments of downstream computer makers increasing recently, a market watcher predicted that DRAM spot prices would once more pick up at the end of 2000 or early in 2001, and benefit from booming sales until 2003. Samsung Electronics and Hyundai Electronics, Korea's two DRAM titans, are rumored to have been working to persuade Taiwan-based makers to jointly lower the 64Mb DRAM spot price below US$4, in the hope of creating new demand for DRAMs. A local DRAM maker agreed that this would be a useful stimulus, saying that DRAM spot prices of less than US$4 would lure medium-term and long-term users back to the market, as the price is close to Micron Technology's manufacturing cost of US$3.50. However, Nanya Technology Corp. rebutted the rumor, pointing out that several Korean DRAM makers had indeed visited Nanya to exchange opinions about the DRAM industry, but hadn't discussed concerted measures to slash prices. Nanya said it wouldn't sell its DRAM products at such irrational prices. In Asia, DRAM spot prices fell to US$4.50-US$4.60 per unit, and failed to test US$3.90 due to a lack of sellers. In the United States, the DRAM spot price remains stable above US$5. As a result, Winbond Electronics Corp. and Powerchip Semiconductor Corp. said that they would rather increase their inventory and not sell their products at less than US$4. According to a local DRAM maker that asked to not be named, Hyundai shouldn't expect to guide the DRAM spot price. That's because few Taiwan-based makers need to sell off their products as Hyundai did in order to fund its heavy debts. According to the report, Hyundai has been dumping its inventories recently in the spot market, eventually lowering the DRAM spot price to US$3.80. However, the impact is limited to local makers, said an analyst, as Hyundai sold second-class chips, not core-products in the market. The fall in the prices of 64Mb DRAMs from about US$8 to below US$5 in recent months may be a blessing in disguise for the long-term future of the DRAM industry. The decision by many DRAM makers to delay their 12-in. fab expansion efforts due to the failure of fund-raising on slumping chip prices should eventually restore the control of DRAM price into the hands of sellers, once the traditional relationship between supply and demand is reasserted. Related story: Contract Prices Continue Falling in Asian Market (Commercial Times, Taiwan)