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

To: Fabeyes who wrote (45348)	4/23/1999 2:29:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 53903

Glut pushes DRAM (64) prices further south By Jack Robertson Electronic Buyers' News (04/23/99, 12:25:15 PM EDT) OEMs can relax for the time being: Spot-market prices for 64-Mbit PC100 SDRAM plunged again last week, reaching new record lows of $7.50. Independent distributors NECX Private Exchange and American IC Exchange expected prices to continue falling for another month or more. “There's just too much supply coming into the market-far more than we had expected,” said Frank Cavallaro, NECX director of worldwide sales. “I don't see PC100 prices bottoming out for the rest of the [second] quarter.” The continuing decline (DRAM prices are down 25% so far in 1999) is fast washing out supplier hopes that the market stabilization witnessed earlier in the year will last. Instead, an avalanche of PC100 chips hit the market in late January and shows no signs of letting up, according to Paul Myers, DRAM commodity specialist for AICE. OEM contract prices on average are about 50 cents more than the spot price, but in some cases are coming close to parity, said Sherry Garber, analyst with Semico Research Corp., Phoenix. OEM buyers, which had been trying to extend contract terms over several months when DRAM prices were inching up, are now reportedly seeking weekly contracts to take advantage of falling rates.Don Baldwin, vice president of sales for Micron Technology Inc. said recently in an interview with analysts that PC100 DRAM prices “have been on a linear downward slope since January.” He saw no letup on the horizon. A.A. LaFountain III, analyst for Needham & Co., New York, said the steady fall in workhorse PC100 prices could throw all DRAM producers back into the red. Micron, one of the few profitable DRAM makers, earned a modest $22 million in its second fiscal quarter this year after two quarters of losses. But LaFountain wondered whether the DRAM glut would cut prices faster than top-tier suppliers like Micron and Samsung Electronics Co. Ltd. can reduce production costs. Samsung reported contract-pricing pressure specifically for 8-Mbit X 8 PC100 SDRAM, but said supplies of 16-Mbit ¥ 4 were still tight. Some higher-density chips, though still in their introductory market stage, were also suffering, according to independent distributors, with certain configurations of 128-Mbit SDRAMs dropping sharply last week to new lows of between $30.66 and $37. “I think it's temporary,” said Avo Kanadjian, vice president of memory marketing for Samsung Semiconductor Inc., San Jose. “But it doesn't help that it's coming in the second quarter, which is traditionally our slowest season.” Ironically, prices for trailing-edge DRAMs, such as EDO and fast-page-mode, continued to rise last week. Demand for older memory types remained strong from telecom-equipment and computer-peripheral OEMs, as well as large PC-server builders. Supplies continue to tighten as the biggest DRAM makers shift production lines rapidly to higher-speed SDRAM products. Danny Lam, analyst at Fisher-Holstein Inc., Wilmington, Del., said falling PC100 SDRAM prices to some extent follow the usual second-quarter slowdown in OEM demand, especially from PC buyers. He expected the cycle will take its traditional upturn in the third quarter, but cautioned that the industry is “seeing more volatility in the market with wider swings of the business cycle.” ebnews.com