Components | July 24, 2012
DRAM pricing strengthens as inventory level falls
Pricing for dynamic random access memory (DRAM) is set to increase as a key indicator shows that inventory levels are falling relative to demand, according to IHS.
The steady upturn of the DRAM market is reflected in the current Weeks of DRAM Inventory Index, which dropped to 11.6 weeks in the first quarter this year, down 4 percent from 12.1 weeks in the fourth quarter of 2011. It was the second consecutive quarter of improvement since the index hit 12.9 weeks in the third quarter last year. The decline also represents a significant turnaround from the major increases in the indices that ruled during most of 2011. Declining stockpiles of DRAM indicate that supply is coming into better balance with demand, resulting in stabilization of pricing. “The latest drop in the Inventory Index is due primarily to an aggressive stockpile burn-off from Japanese supplier Elpida Memory Inc., which declared bankruptcy in February,” said Clifford Leimbach, analyst for memory demand forecasting at IHS. “The action taken by Elpida—and the resulting drop in overall inventory levels for the industry in the first quarter—is a one-time event unlikely to be repeated. Even so, the reduction in stockpiles in early 2012 means that pricing should continue to strengthen in the second half of the year.” Average pricing for DRAM in the 1 gigabit-equivalent density is preliminarily estimated to have risen by 1.5 percent in the second quarter, and is then set to climb by 7.7 percent and 3.5 percent in the third and fourth quarters, respectively. This follows sharp declines of 24 percent and 12.4 percent in the third and fourth quarters of 2011, as well as a 5.9 percent decrease in the first quarter of 2012. Inventory in the first quarter could have declined to even lower levels were it not for the elevated DRAM stockpiles of two of the largest DRAM players. SK Hynix Semiconductor Inc. of South Korea and U.S.-based Micron Technology Inc. saw a modest 15 percent and 8 percent rise, respectively, in their inventories during the period, putting upward pressure on the index value that also prevented the drop from being larger in the first quarter. Still, the inhibiting effect of SK Hynix and Micron should not be construed as a negative, IHS believes, because there is strong feeling throughout the industry that the DRAM average selling price (ASP) will strengthen in the second half of this year. Renewed optimism for PCs spurred by Ultrabooks, and the impending release of Windows 8, will likely translate into strengthened DRAM demand, bringing supply and demand into closer balance. And as DRAM prices rise because of these market forces, SK Hynix and Micron could be well-positioned to take advantage and sell the inventory that they have built up. Such favorable conditions point to a stronger DRAM market during the next few quarters and mean that the index will continue to decline. DRAM firms appear to be comfortable with their inventory levels overall, positioning themselves to reap the rewards of an expected increase in demand during the succeeding quarters. Despite the positive step forward for the market, the DRAM Inventory Index in the first quarter remained elevated above the 9.0 weeks recorded the same time a year earlier in the first quarter of 2011. Furthermore, the index during the last four quarters has been above the long-term average of 9.5 weeks. Anything exceeding this threshold is considered undesirable because it indicates high inventories and weak DRAM demand. And with DRAM prices on the retreat, holding onto inventory costs money for firms as they are unable to sell product immediately for revenue.
Infineon and Fingerprint team up to drive mass deployment of biometric cards With biometric payment cards an integrated fingerprint sensor make contactless payments more convenient, more secure and hygienic; something that the current global situation has highlighted a need for.
Silicon Mitus starts mass-producing automotive OLED PMIC Power management IC (PMIC) specialist Silicon Mitus, has completed the development of an automotive OLED PMIC and says it will start supplying the new products in the global automotive market.
Farnell signs new distribution agreement with KOA Farnell says it has strengthen the depth and breadth of its passive component range with the addition of KOA Europe GmbH.
II-VI with domestic and foreign acquisitions Compound semiconductor specialist, II-VI Incorporated, has entered into a definitive agreement to acquire all outstanding shares in Swedish SiC epitaxial wafers specialist, Ascatron AB. At the same time, II-VI says it will acquire all the outstanding interests of the owners of the parent of INNOViON Corporation.
Microsoft invests in AI Chip company Syntiant, a deep learning tech company providing AI voice and sensor solutions, has completed a USD 35 million Series C funding round.
Meyer Burger sells its microwave and plasma maker Muegge Meyer Burger Technology is selling its microwave and plasma technology company Muegge GmbH, to investment company HQ Equita.
ON Semi looking to sell Japanese facility ON Semiconductor is exploring a sale of its manufacturing facility in Niigata, Japan. The intended sale of the facility is part of the company’s plan to optimise its manufacturing footprint and sharpen its focus on highly differentiated power, analog and sensor products.
New VP of business development at Smith The distributor of electronic components and semiconductors has appointed Renato Souza to the position of Vice President of Business Development. Renato previously served as Vice President, Latin America of Smith since 2017.
Bosch launches 5G tests at Reutlingen wafer fab The German company believes 5G will be a key building block of digitalization and connectivity in manufacturing and logistics. And for that reason, Bosch is now starting compatibility tests and channel measurements for setting up a 5G network in its wafer fab in Reutlingen.
ACM Research receives orders from two new analog/power IC customers The supplier of wafer cleaning technologies for advanced semiconductor devices, has received purchase orders and final stage bidding activities for a total of USD 36 million from two new China-based customers that manufacture analog and power IC devices.
ClassOne's Solstice plating system selected for advanced MicroLEDs Semiconductor equipment manufacturer ClassOne Technology announces the sale of its Solstice GoldPro electroplating system to an unnamed developer of microLED technology for advanced applications.
Jenoptik: order intake down on prior year; order backlog slightly up From January through early March business performance was in line with expectations, but clear impacts of the corona pandemic and increasing uncertainty within the automotive industry became apparent from late March on.
Smiths Detection completes acquisition of PathSensors Smiths Detection has completed the acquisition of PathSensors, a bio-technology solutions and environmental-testing company, based in Baltimore, MD, USA.
Saab divests Dutch-based QPS Saab has divested the Dutch-based company QPS (Quality Positioning Services), a provider of hydrographic software solutions within the global maritime industry. The decision is in line with Saab’s strategy to optimise its product portfolio and increase focus on five core areas.
Eyeing SiC and GaN potential – GlobalWafers team up with NCTU Advancements in 5G and electric vehicle technologies are bringing the mounting demands of power semiconductor. GlobalWafers is teaming up with the National Chiao Tung University (NCTU) to develop the third generation semiconductor material.
Phison expands with new R&D centre Taiwanese NAND Flash controller IC and storage solutions provider, Phison Electronics, broke ground on a new R&D center and inventory management in Guangyuan Science Park in Zhunan township, back in late march.
Infineon swings to loss as the pandemic continues impact target markets “Infineon has so far coped well with the challenging situation caused by the coronavirus pandemic. As a company, we reacted quickly to the new situation and established a framework that has enabled us to stabilize our business,” says CEO Dr. Reinhard Ploss.
Murata completes new production building The Japanese manufacturer’s subsidiary, Izumo Murata Manufacturing, has completed the construction of a new production facility which started back in August 2019.
Analog Devices team up with Intel to address 5G network design challenges The companies are collaborating to create a flexible radio platform that addresses 5G network design challenges and will enable customers to scale their 5G networks more quickly and economically.
Atlas Copco has acquired the technology and operating assets of iTrap The Swedish company has acquired a technology for process diagnostics and control in the semiconductor industry.Load more news