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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (24386)	5/22/2001 10:52:04 PM
From: DebtBomb	Respond to of 37746

Singapore Monday May 21, 7:07 PM Asia DRAM Report: Spot Prices Slide On Motherboard Falls By Dermot Doherty Of DOW JONES NEWSWIRES TAIPEI (Dow Jones)--Spot prices of dynamic random access memory (DRAM) chips tested new depths over the past week as shipments of motherboards continued to wane after picking up during the first quarter. Some industry sources also reported a sharp fall in demand from mainland China, one of the few bright spots in the PC sector this year. "Demand is not that strong in the second quarter and PC motherboard shipments have been slowing from the first three months of the year - that's the bottom line," said Eric Wang, head of global semiconductor research at ABN Amro in Taipei, who believes the DRAM sector should see some improvement in the third quarter. A motherboard is the circuit board that holds the microprocessor and memory chips. The April-June period is a traditionally slack time for PC demand, which tends to pick up during the third quarter amid back-to-school PC sales. The spot price of a 128MB chip has slipped to a record low of US$3.30 in recent days from US$3.60 a week ago, while a 64MB chip has fallen to US$1.60. A pickup in motherboard shipments in February and March had been interpreted by some in the PC industry as a sign of the market bottoming out, prompting many spot market players to replenish depleted inventories in anticipation of improving demand. However, the uptick was brief and limited to the clone market for unbranded PCs, which accounts for between 30% and 50% of the total PC market, without any improvement at big-name PC manufacturers. "March motherboard shipments were strong due to a low base period in January and February and strength in the clone market in Asia and Europe," said Tony Tseng, an electronics analyst at Merrill Lynch in Taipei. Moreover, "in the second quarter, even orders from the clone market have started to weaken." Reflecting the softening demand, sales at Taiwan motherboard giant Asusktek Inc. (Q.ATK) tumbled almost 28% on month in April. Tseng said PC purchases may also have been stalled by the transition in the industry to Pentium 4 microprocessors and by the shift towards next-generation memory technologies Rambus and Double-Data Rate (DDR). Meanwhile, there have been scattered reports in DRAM channels that demand from the previously robust China market has started to cool off. "In April, China was still very strong, but this month we've seen a very clear fall in demand," said one sales executive at a module maker in Taiwan. DRAM brokers also reported continued aggressive selling in the spot market by chip giants such as Hynix Semiconductor Inc., Micron Technology Inc. (MU) and Samsung Electronics Co. Ltd. (Q.SSE). One dealer said 128MB Hynix chips have been selling for as little as US$3.00, while Micron chips have been going for US$3.25. Although inventories at several major DRAM players had been coming down during the first quarter, fresh concerns have surfaced that they may be on the rise again. Such companies sell the bulk of their output on contract, but when PC demand slips excess product tends to spill over into the spot market, forcing smaller unbranded players to further lower their prices. -By Dermot Doherty, Dow Jones Newswires; (8862)2502-2557 dermot.doherty@dowjones.com