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 : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: gnuman who wrote (69152)	3/26/2001 10:43:19 AM
From: Don Green	Respond to of 93625

Asia DRAM Report: Price Stability Signals Bottoming-Out By DERMOT DOHERTY Dow Jones Newswires TAIPEI -- Evidence continues to mount that the ailing market for dynamic random access memory (DRAM) chip may be nearing its bottom, semiconductor industry experts said. PC shipment growth now appears to be less anemic than previously expected, and both original equipment manufacturers (OEM) and DRAM distributors are rebuilding depleted stockpiles, they said. As a result, the spot price of a 64MB DRAM chip in Asia has crept higher to US$2.25 from US$2.20 in recent weeks, while 128MB DRAM chips have strengthened to US$4.40 from US$4.20 a piece. "What you're seeing right now is pretty good, but not fantastic, demand on the PC side," said Dan Heyler, head of regional semiconductor research at Merrill Lynch in Taipei. "But the major contributing factor is that we're seeing an inventory replenishment (by OEMs), which means we're getting a little bit of a kick in the spot market." OEMs were among the most aggressive sellers in the DRAM spot market late last year when strong demand for PCs fizzled out after a robust first half. However, restocking that began during the second week of March has continued and the overall outlook for the PC sector is now a lot less dire than many had feared. At an Asia-Pacific Technology Conference sponsored by Merrill Lynch in Taipei last week, Taiwan chip foundry giants Taiwan Semiconductor Manufacturing Co. (TSM) described demand from the PC segment as "stable", while arch-rival United Microelectronics Corp. (Q.UME) reported "good signs" in the sector. Much of the current demand for PCs is coming from developing markets such as mainland China, in addition to regions such as Europe, dealers said. Indeed, Legend Holdings Ltd., China's biggest PC manufacturer, said on Friday it expects PC shipments on the mainland to grow by a compounded annual growth rate of around 23% over the next five years. Joe Osha, Merrill Lynch's U.S. chip analyst, told investors at last week's conference he believes PC unit growth is holding up reasonably well, especially outside North America. "I don't think the picture in 2001 is going to be weak unit sales...the picture is going to be decent...unit growth," Osha said. Players in DRAM distribution channels in Taiwan - while still very cautious - agreed that there are signs of improvement in the PC market. "Demand is a little bit better...we've had a string of OEM companies place orders," said one executive at a DRAM dealership in Taipei. However, prices could come under pressure again during the second quarter, a traditionally slack period for PC demand, though falls similar to those witnessed in February are unlikely, industry experts said. "We won't see the same degree of free-falling as we saw in the first quarter and we're getting closer to a base," said Merrill Lynch's Heyler, while noting that a "fundamental recovery won't occur until the latter part of the second half". He estimates that chipmakers have between three and four weeks of inventory - still above a comfort zone of two to three weeks - and as long as supply outpaces demand, there will be volatility in DRAM spot pricing. Semiconductor industry experts also pointed to a ramping-up of production of high-performance Rambus DRAM chips by major player Samsung Electronics Co. (Q.SSE) as a sign that supply of standard DRAM chips could contract over coming months, further supporting spot prices. In February, Samsung joined forces with chip giant Intel Corp. to expand the market for Rambus DRAM, and the Korean company plans to boost RDRAM output to 10 million chips per month. In addition, analysts said a slight pullback in shipments at some chipmakers, particularly Korea's Hyundai Electronics Industries Co. (Q.HEL), has contributed to the recent firming of spot prices. -By Dermot Doherty, Dow Jones Newswires; (8862)2502-2557 dermot.doherty@dowjones.com