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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: MR. PANAMA (I am a PLAYER) who wrote (41571)	12/22/1998 5:08:00 PM
From: DJBEINO	Read Replies (3) \| Respond to of 53903

Why DRAM prices are finally firming SAN JOSE -- After a three-year memory glut, it almost seems like a miracle. A shortage of sorts in DRAMs has emerged and PC makers are finding it more difficult to buy the faster new DRAM types. All of this is putting an end -- at least for now -- to the steep price declines that have plagued 64-megabit chips this year. This has been one of the worst possible years for DRAMs. Average selling prices for 64-Mbit DRAMs plunged much sharper than expected this year, falling from $16.50 each in January to a low point of $7.80 in July, according IC Insights Inc. That 53% drop has played a major role in the huge decline of DRAM revenues this year. They are expected to be down 31% to $13.7 billion from last year's sales, according to the Scottsdale, Ariz., market researcher. But prices started recovering in July. The average selling price for 64-Mbit DRAMs has rebounded a bit to about $8.45 each and it is expected to reach $8.50 in December, according to IC Insights. What is causing this slight uptick in ASPs is a combimation of reduced capital investments for adding fab capacity and an 80% growth in DRAM bit shipments this year. Also a factor is a shortfall in supplies of PC100 DRAMs - especially 64-Mbit memories, according to some product managers and analysts. "Right now, there are only three companies that can produce PC100 synchronous DRAMs in high volume," pointed out Jim Handy, memory analyst at Dataquest in San Jose. He said that only Micron Technology Inc., Samsung Electronics Co., and NEC Corp. have been able to boost their PC100 production to high volumes. Toshiba Corp. appears to be close, he said, to shipping high volumes of the new high-speed DRAMs. Other memory suppliers are still working to ramp up their production lines. But the gap between demand and available capacity for the high-speed DRAM is still not shrinking. "As a result, there's not enough of the chips to go around," Dataquest's Handy pointed out. While the shortages are still not considered severe, the inability of vendors to keep up with the market is good news indeed for loss-riddled memory merchants. "PC100 availability has tightened up, as the number of platforms using the technology has increased," explained Jeff Mailloux, DRAM marketing manager for Micron Technology in Boise, Idaho. He acknowledged that Micron has placed some of its products on allocation, but he wouldn't identify which chips were in short supply. The current supply of PC100 DRAMs is falling about 5% short of demand, estimated Peter Eckelmann, director of memory products marketing for Siemens AG's Semiconductor Group in Munich. He estimated that about 80% of DRAM bookings today are for 100-MHz memories. "I believe that it will be close to 90% next year," Eckelmann predicted. "The price level today is increasing and this is more proof that there is a shortage of 64-Mbit and more significantly a shortage of 64-Mbit PC100 DRAMs." On top of that, memory suppliers that haven't been able to invest in upgrading their fabs to quarter-micron technology are having big trouble supplying PC100 memories, according to Eckelmann. "And many [DRAM suppliers] haven't [upgraded]," he said. "Some suppliers have tried 0.28-micron with not much success and 0.35-micron won't do," he added. But "those that have invested [in 0.25-micron] are in a good position." semibiznews.com