© bahar bostanci / dreamstime.com Components | January 31, 2012
2HJan. 4GB contract price rises
2HJan. 4GB contract price rises, DRAM makers’ losses may shrink.
According to DRAMeXchange, 2H Jan. 2GB DRAM contract price remained flat, with average price at US$9.25. However, 4GB deals have already been concluded at a high of US$17.25, greater than 1H Jan.’s US$17, while the average stayed the same at US$16.5. This is an indication that 4GB module price growth momentum is stronger than that of 2GB modules, and overall concluded transaction price is noticeably headed towards exceeding average price. Based on the US$17.25 price, 2Gb single chip price is approximately US$0.9. DRAM makers further along in the 4Gb transition process are enjoying costs of US$1.81 per chip. Basing calculations on the mature 30nm process, production cost just about breaks even. At the current stage, DRAM manufacturers’ actual profitability and process migration progress are highly related, and both the shrinking of process technology and the transition to 4Gb single chip production play key roles in profitability. In terms of the spot market, as the Chinese New Year holiday has just ended, there have been few concluded deals. Average 2Gb spot price is in the US$0.94-0.97 range, gradually closing the gap between spot and contract price. Whether spot price will continue to rise, thereby stimulating a contract price increase as well, will not be clear until further evaluation of Chinese New Year sales. However, according to TrendForce research, module makers who play an important role in the spot market are planning to slow inventory restocking to deal with possible DRAM price increases, which will provide substantial support for spot price. DRAM supply price increase brewing, weak market demand remains an uncertainty DRAM industry oversupply was severe in 2011, causing long-term, weak DRAM prices. Besides the largest Korean manufacturers who stayed profitable, makers were unable to withstand the prolonged losses and had to react by not only lowering capacity utilization rates and attempting to decrease net cash outflow, but lowering this year’s capex figures as well – an indication of the extent of makers’ difficulties. Benefitting from 4Q11 PC DRAM production cuts that amounted to approximately 20% of total capacity, TrendForce expects the DRAM oversupply ratio to improve significantly, decreasing from the original 16% to 10%, the healthiest figure in the past year. DRAM makers are becoming inflexible in terms of price quotes, as stabilizing and gradually increasing DRAM price is tacitly understood as a shared industry goal. Many DRAM manufacturers have set a minimum for price quotes, which not only prevents DRAM price from falling further, but encourages buyers to increase purchase volume for each order. Some makers are even actively negotiating with buyers to set shipment volume and price on a quarterly basis. DRAM suppliers are gradually employing more rational policies to deal with price changes, which is expected to have a positive effect on price stability. However, whether or not the supply-side adjustment is fully effective will depend on support from the demand end. According to TrendForce research, as the market is currently in the slow season and there is a lack of momentum for PC upgrades, total notebook shipment volume is expected to decrease by a considerable 9.7% QoQ, likely the lowest quarterly demand for the year. Furthermore, although the market is bubbling with rumors of impending DRAM price increases, in order to save on key component production cost PC OEMs are not likely to increase content per box – instead, they are turning towards the spot market. Affected by the decrease in business days in January, concluded transaction volume was as expected, with purchasing volume low. As for February, buyers are still biding their time as they are highly concerned about the demand situation. In light of this, currently DRAM makers are continuing their technology migration efforts, but there has been no news of manufacturers increasing capacity utilization rates to increase production. Taking both supply and demand into consideration, there is limited possibility of DRAM price exhibiting a V-shaped curve. DRAM makers are all treading thin ice when it comes to product planning, carefully maintaining price and trying to make it through the weak first quarter to the more optimistic second half of the year.
COVID-19 highlights the gravity of the secondary market for SME Cha Jin-Seok, Chief Financial Officer of SK Hynix, said it best in the company’s Q1 earnings call, “Because of a never experienced pandemic, even basic business activities such as maintaining normal operations and predicting future demand have become challenging tasks.”
GlobalFoundries to implement ITAR at US manufacturing facility GlobalFoundries plans to implement export control security measures at its most advanced manufacturing facility, Fab 8, in Malta, New York.
Rebound Electronics expands in Asia The independent supplier of electronic components says it is investing to increase its market coverage in Asia with the opening of several new offices and setting up a customer service & telesales centre.
Samsung expands foundry capacity with new production line Samsung Electronics says that it plans to boost its foundry capacity at the company's new production line in Pyeongtaek, Korea, to meet growing global demand for extreme ultraviolet (EUV) solutions.
Super Dry Totech expands Long Term Storage Solutions offering The most recent development for Super Dry Totech, is the acquisition of a new building to expand on capacity & to minimise risk by assuring continuity should a disrupting incident occur in one of the facilities.
Ynvisible acquires electrochromic display company rdot Printed electronics specialist, Ynvisible Interactive, announces that it will acquire the printed electrochromic displays business of rdot AB of Gothenburg, Sweden.
Manz receives follow-up order for display production equipment Manz says it has received an order with a total volume in the low double-digit million euro range for display production equipment.
Aehr Receives initial order from new customer for FOX-NP solution Aehr Test Systems says it has received orders from a new customer and their subcontract manufacturing supplier for a FOX solution including a FOX-NP full wafer test system, an initial WaferPak Contactor, and a FOX WaferPak Aligner to perform production qualification of their silicon photonics devices.
AIM names new director of product management AIM Solder has appointed Timothy O’Neill to the position of Director of Product Management.
Seoul Semi files patent suit against automotive LED light distributor Seoul Semiconductor says it has filed a patent infringement lawsuit in the United States District Court for the District of New Jersey against Onyx Enterprise Int’l Corp., a distributor of automotive components.
X-FAB expands foundry offering for silicon-based microfluidics In order to address heightening demands, X-FAB Silicon Foundries SE, has taken steps to simplify the integration of microfluidic elements with CMOS and SOI dies.
Renesas withdraw from LD/PD business and close production Renesas has decided to withdraw from the laser diode (LD) and photo diode/detector (PD) businesses, and to close the production line at its Shiga Factory, which manufactures compound semiconductor products.
TSMC confirms its intention to build new US fab The Semiconductor giant has announced its intention to build and operate an advanced semiconductor fab in the United States with support from the US government and the state of Arizona.
Flisom to set up shop in Hungary The Swiss solar technology company chose Kecskemét, Hungary as the location for its plant of industrial capacity.
VRG Earns ISO 9001:2015 Certification VRG Components, an independent distributor of electronic components, have been awarded the ISO 9001:2015 certification.Load more news