DRAM contract prices jump after fire at plant
CNATAIPEI -- Contract prices of dynamic random access memory (DRAM) chips quoted for the second half of Sept. jumped due to tight supply after a plant of the world's second- largest DRAM maker, SK Hynix Inc., was hit by a fire that affected production, a research group said Thursday.
October 4, 2013, 12:17 am TWN
According to DRAMeXchange, a research division of Taipei-based market information advisory firm TrendForce, the contract price of the benchmark DDR3 2Gb DRAM rose 8.86 percent in the second half of Sept. from a month earlier to US$1.72, the highest level so far this year.
In the wake of the latest prices in Sept., shares of Nanya Technology Corp. gained 3.96 percent on the Taiwan Stock Exchange Thursday to close at NT$4.73 (US$0.16), while shares of Inotera Memories Inc. rose 2.79 percent to end at NT$18.45.
Since the Sept. 4 Hynix fire in Wuxi, China, the global DRAM market has been faced with a pressing supply shortage and DRAM prices have skyrocketed, as the factory in China makes up about 50 percent of the total output of the South Korean firm, which owns a 30-percent global market share.
The fire has had a serious psychological impact on DRAM buyers, who have been scrambling to build up their inventories amid fears of an escalating supply shortage, a move that has boosted sharply DRAM prices in both futures and the spot market, market analysts said.
On Wednesday, DRAMeXchange said the DDR3 2Gb DRAM price in the spot market rose 1.44 percent from the previous day to US$2.333, a 34-month high.
In the wake of the fire, DRAM prices in the spot market have risen about 40 percent, according to DRAMeXchange.
Market analysts said Nanya and Inotera, the two major DRAM suppliers in Taiwan, are expected to see their bottom lines improving on the back of the rising DRAM prices.
In the second quarter, Inotera posted NT$0.62 in earnings per share (EPS), compared with NT$0.11 in loss per share recorded in the first quarter, while Nanya posted NT$0.07 in EPS, compared with NT$0.02 in EPS registered a quarter earlier.