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Memory sector windfall may not persist in Q2

TAIPEI, Taiwan -- Industry analysts yesterday announced their outlook for the memory sector in the second quarter, indicating an expected decline in NAND flash while forecasting that DRAM will maintain its growth trajectory.

Propelled by rapidly growing demand for tablets and mobile handsets, the price of 2-gigabyte DDR3 memory chips in the first quarter rose 57.8 percent from US$0.83 per unit to US$1.31, while 4-gigabyte DDR3 chips rose from US$15.75 to US$23.5, up 49.2 percent, according to a report by TrendForce.

The report also indicated that for NAND flash, prices in the first quarter for 32-gigabyte multilevel cell chips rose 19.8 percent, climbing from US$2.47 to US$2.96, while prices for the larger 128-gigabyte and three-layer cell (TLC) chip variants rose by 1 percent.

Memory Makers Report Improving Performance

Meanwhile, a number of memory and related module makers reported improved performance in the first quarter. DRAM maker Inotera Memories (華亞科) reportedly turned a profit in March, with revenues reaching NT$1.25 billion, representing an earning contribution of NT$0.21 per share. The company's losses for the first quarter totaled at NT$613 million, improving 83.5 percent compared to the fourth quarter — a loss of NT$0.11 per share.

Memory module maker ADATA (威剛) in the first quarter recorded revenues of NT$7.641 billion, up 6.14 percent from the previous, and up 7.98 percent year-on-year. In addition, Transcend (創見) and Phison (群聯) are reported to be expecting improving margins for their first-quarter performance compared to the previous.

DRAM Favored in Short Term

Propelled by demands from the launching of a wide variety of mainland-branded tablet computers, the price of DRAM memory is expected to retain its growth trajectory for the time being, according to TrendForce. The price of 4-gigabyte DDR3 DRAM has the potential to rise by an additional 30 percent, reaching US$30 per unit, as the high season for mobile device launchings approaches, according to TrendForce.

However, the research institute is expecting a decline in the forward price of high-capacity NAND flash memory, while predicting relative stability for the price of low-capacity NAND flash, due to a reduction in market supply.

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