Taiwan’s networking equipment makers have been actively negotiating contracts for SDRAM supplies for the second half of the year to prevent their operations from being hit by possible shortages and price increases.

CyberTAN Technology president Eric Hwang and Askey Computer president Robert Lin said their companies started negotiating second-half supply contracts with SDRAM makers in May after news spread that memory prices would increase.

Both companies stated they have secured sufficient SDRAM supply for the rest of this year, and their gross margins will not be affected if memory prices increase.

Cameo Communications is also trying to secure SDRAM supply, with general manager Evelyn Wang stating a possible SDRAM price increases will affect the company’s gross margins in the second half of this year. Cameo originally expected its second-half gross margins to be in the 14-15% range.

However, some sources in the IC market claim any increase in SDRAM prices should be limited. Price pressure has been coming from low production rather than strong demand, and if Samsung decides to increase SDRAM shipments, prices are not likely to increase, the sources said.

By: DocMemory
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