Friday, February 18, 2005
A spokesperson at the ProMOS Technologies Inc. said that their first-quarter profits would drop slightly from last quarter because of the lower chip prices and reduced output. Albert Lin said: "The profit decline will be mild, as contract prices are stabilizing due to a tight chip supply."
ProMOS earned NT$10.1 billion last year on revenue of NT$42.9 billion Chen Min Liang, chairman of ProsMOS. Chen said: "overall, 2005 will be a relatively stable year tracking the history of the dynamic-random-access-memory industry, though it's not as good as 2004,"The company’s fourth quarter net income rose to NT$1.9 billion compared with NT$942.7 million a year earlier.
Chen's comments are based on anticipated "reasonable" price fall. Chip prices will only decline by less than 30 percent this year, which would be good enough for memory chipmakers to make profits, as costs continue to fall after moving to more advanced technologies, Chen said. A researcher from the DRAMeXchange said the prices of DRAM will decline to US$2 per unit, but the price will bounce back in the second half as rising demand for faster DDRII.
Meanwhile, the DRAMeXchange conducted a survey from traders on the China spot market, showed that the demand from end users was good last week, but channel distributors currently have low inventory levels. In the contract market, PC OEMs expect demand to return to normal in the second half of this month, and DRAM vendors will release chips in a controlled manner, rather than dump them this week. In particular, DRAM buyers based in China seem to be under increasing pressure to purchase chips next week. On the other hand, suppliers will be under less pressure than in the first half of this month. Pricing will be highly dependent on the strength of demand from China this week.
By: DocMemory
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