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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (542)	11/15/2001 9:16:16 AM
From: Proud_Infidel	Respond to of 25522

taipeitimes.com Semiconductors rebound on shortages ARTIFICIALLY HIGH: Memory-chip prices made their first four-day gain in eight months but many believe larger makers are manipulating the market to force out competitors BLOOMBERG SEOUL Prices of computer-memory chips, the main product of companies such as Samsung Electronics Co, Micron Technology Inc and Hynix Semiconductor Inc, made their first four-day gain in eight months as computer makers bought chips to restock falling inventories. The spot price of the benchmark 128Mb dynamic random-access memory (DRAM) chip rose 11 percent to US$1.65 Tuesday, rounding out a 60 percent surge in the last four days. Before the gains, the price declined on all but two days since March 27, when it was almost US$5. The slump in prices reflected the lack of demand for the chips, which provide the main memory for personal computers. The US$30 billion industry is forecast to shrink as much as 67 percent this year as PC makers -- themselves suffering the first actual decline in sales since the 1980s -- slashed component orders. "PC inventory is very low and people feel obliged to restock ahead of Christmas," said Chris Hsieh, an analyst at ING Barings Securities in Taipei. Hsieh said a number of other temporary factors, such as factory upgrades, have reduced oversupply from about 18 percent to 10 percent. The respite may be temporary. He expects prices to continue to decline next year. At least one chipmaker is slightly more optimistic. "We may have seen the bottom for chip prices," said James Chung, a spokesman for Samsung Electronics. "The price may correct again later but we are conservatively forecasting that it won't go as low as it has." Chip prices typically surge toward the year-end holiday season when sales of PCs and other electronics peak. Prices usually decline through the first six months of the year. Another factor fueling concern that the recent increase in chip prices is artificial is the belief that larger makers had been manipulating the market to try to force out financially weaker competitors. Korea's Samsung and the US' Micron, which hold more than 40 percent of the market, may have been maintaining production levels in an attempt to keep prices low and place further pressure on Hynix, the third-largest DRAM maker. Hynix was given its second multi-billion dollar bailout this year by creditors at the end of last month, keeping it in business. "Samsung and Micron haven't been active in the spot market lately, maybe they've changed their minds about squeezing Hynix out," said Eric Tang, a vice president with Powerchip Semiconductor Corp, Taiwan's largest computer memory-chip maker by market share. "We don't think it's a long-term rise." While the price may have risen, it is still lower than the level needed to return chipmakers to profitability. A 128Mb chip costs about US$2 to make, ING's Hsieh said. Samsung became the last DRAM maker to say it is losing money on semiconductors. The largest memory-chip maker said last month its chipmaking division had a 380 billion won (US$296 million) loss in the three months ended September. All other memory-chip makers have reported losses for at least two quarters.