Wednesday, January 29, 2003
DRAM sales for Taiwan's memory chip makers are expected to improve in the fourth quarter but making a profit will remain stiff amid ongoing DRAM price fluctuation.
Most DRAM companies are expected to improve their bottom line on strong demand and high prices for faster DDR chips in the fourth quarter. But the outlook is bleak as more output from new plants and shrinking demand put pressure on prices.
Benefit from its early introduction of DDR chips, Nanya Technologies is expected to post fourth-quarter net profit of T$1.76 billion, tripling from the previous quarter, according to a consensus estimate from 12 analysts posted by Multex Global Estimates.
Demand for the DDR chips soared last year as computer makers brought the new standard into the mainstream, pushing the spot price of a 256 megabit DDR chip to near US$9 in the fourth quarter.
However, the price was halved as Christmas demand disappointed and it now lingers near $4.4, close to cost of production for most manufacturers. Some analysts say it could fall to near $3 in the first quarter.
Slow in rolling out DDR chips, analysts predict Winbond to announce a net loss of T$737 million for the last quarter, widening from a loss of T$283 million in third quarter.
In addition, many DRAM makers like ProMOS, Winbond and Nanya all have new generation 12-inch wafer plants that already are or will be ready for mass production this year. The additional output is likely to apply further pressure to already low prices.
ProMOS posted an initial fourth quarter net profit of T$600 million, doubling forecasts and reversing losses in the previous quarter and from a year earlier. On the other hand, Infineon has won the case on court's ruling to terminate the licensing agreement to provide DRAM technology to ProMOS this week.
By: DocMemory
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