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

To: Proud_Infidel who wrote (5243)	1/31/2003 9:16:54 AM
From: Proud_Infidel	Respond to of 25522

DRAM Bulletin: An unhappy new year By Nam Hyung Kim Semiconductor Business News (01/31/03 07:26 a.m. EST) The following column was provided to SBN by Nam Hyung Kim, a senior analyst with iSuppli Corp., an El Segundo, Calif.-based market research firm. Happy new year? Not for DRAM suppliers.With the Chinese New Year holiday upon us, Double Data Rate (DDR) SDRAM prices are on the decline again, and don't appear to be ready to recover anytime soon. The U.S. spot market pricing for 128-Mbit DDR SDRAM in the by 8 configuration fell by 9% to $2.18 this week, while 256-Mbit DDR SDRAM dropped by 14% to $4.30. With the latest decline, U.S. spot market pricing for both densities now has been decreasing for 12 weeks straight. In contrast, SDRAM prices held steady this week. However, the lack of price erosion in SDRAM is not a very significant event, given that demand for the older memory is dwindling and suppliers are decreasing production. Many adverse factors are pressuring DDR prices now. The first factor is that DRAM demand from PC OEMs has all but evaporated. Although there is a small increase in demand from small- and medium-sized OEMs, they are hesitant to issue purchasing orders because prices are crashing down on a daily basis. The second factor is that suppliers are pricing DRAM modules for small- and mid-sized system manufacturers at very aggressive levels in order to clean out their inventory. Because of this, buyers are turning directly to suppliers, not the spot market, to buy modules. Third, spot market dealers and distributors are disposing of their inventory before they shut down their operations through the first week of February for the Chinese New Year holiday. Falling prices are making traders hesitant to hold inventory during the long holiday in the Asian market. Many Asian workers and companies will be taking off the entire week of February 3 as a vacation. Price pressure on DRAM modules is more serious than on components, as demand for upgrade modules and graphics cards is relatively better compared to that for DRAM parts in the spot market. In other DRAM-supply developments, the breakdown of the ProMOS joint venture between Mosel Vitelic and Infineon Technologies AG pressured Mosel to sell-off its parts on the Asian spot market at the end of January. This will impact Asian spot market prices negatively in the short term. However, unless ProMOS and Mosel find a new technology partner soon -- perhaps Elpida Memory Inc. -- their capacity growth will be limited and lower than planned, which could exert a positive impact on the spot market in the long term. iSuppli predicts the present gloomy pricing situation will persist, at least until the middle of February, given the absence of positive forces in the market now.