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

To: Proud_Infidel who wrote (42288)	2/16/2001 1:04:15 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Asia DRAM prices fall to historic lows TAIPEI, Taiwan -- Fears of a sharp reduction in inventory by leading makers of DRAMs appeared to be confirmed this week as chip prices in Asia resumed their recent slide. The spot price of a 64-megabit DRAM chip has slipped to historic lows of roughly $2.20 from $2.50 last week, while 128-megabit chips have fallen to $4.30 from $4.60 each. There had been signs that 64 megabit spot prices were bottoming out around the $2.50 level, but industry experts said chipmakers--Micron Technology, in particular--are still having to digest large stockpiles of inventory. "With it being the end of the quarter for Micron, it's likely it will try to reduce inventory and that's putting pressure on prices," said Alfred Ying, semiconductor analyst at BNP Paribas Peregrine Securities in Hong Kong. Moreover, end-of-year earnings announcements by Japanese companies, due out in March, are also expected to be preceded by heavy selling in the spot market, Ying said, making any rebound in the short-term unlikely. Those views were echoed at smaller DRAM makers in the region. "Prices have softened over the past week because of selling by Hyundai Electronics Industries and Micron, which has been quite aggressive in the spot market with its quarter-end coming up," said the sales director at one DRAM maker in Taiwan. He also pointed to heavy selling by Germany's Infineon Technologies. Expectations within the industry that 64-megabit DRAM prices could find support around $2.50-to-$3 were based on the fact that was what it cost to make a chip. However, with no significant rebound in spot prices likely to come during the first half of 2001 due to weak PC demand and high inventory levels, many chipmakers may now be drawing the line at the variable cost of $1.50-to-$2 per chip. Dan Heyler, analyst at Merrill Lynch, estimates that DRAM makers are holding an average one to two months of inventory, with Micron at the top end of that range. "Spot prices will continue to fall as long as inventories are as high as they are," he said. In a research report this week, Merrill Lynch noted Micron has started offering its 128 megabit DRAM chips for $4.50-to $4.80 each, sharply lower than its previous mid-$5 level. However, Merrill believes the short-term pain caused by such price-cutting and capital expenditure cuts may actually help the DRAM market over the long run. "News of Micron's more aggressive behavior, although negative for earnings over the short-term, may prove positive if it hastens the exit of weaker players from the DRAM market," it said. Subject 50522