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Memory chip prices rise as demand peaks

Memory chip prices rise as demand peaks

Some of Taiwan's DRAM makers have reported record monthly sales for August,

highlighting an increase in DRAM prices that could continue in the months ahead.

The higher prices are unlikely to affect PC prices thanks to the stiff

competition among system vendors and makers of other types of components, such

as microprocessors. But users who want some extra DRAM for their PCs could find

themselves handing over a bit more money than before.

Nanya Technology, Powerchip Semiconductor and ProMOS Technologies all reported record sales for August this week. The higher sales stem partly from an increase in PC sales in some parts of the world. That increase drives up prices for DRAM, since most of the chips -- around three quarters of the global supply -- end up in PCs.

Analysts say PC demand could stay robust for the next several months, as

back-to-school demand and holiday demand are followed by the launch of

Microsoft's new operating system, Vista. That could keep prices for DRAM

high.

The spot price Tuesday for the most widely used DRAM, 512M bit DDR2 (double

data rate, second generation) chips, is around US$6.00, according to

DRAMeXchange Technology. Crystal Lee, a memory chip industry analyst at ABN

AMRO Asia in Taipei, forecasts that prices for the chips will remain at or

near that level in coming months.

Powerchip and ProMOS have been improving their ability to make chips using

90-nanometer production technology, which allows companies to make chips that

are smaller, more powerful and more energy efficient. It can also help them

reduce costs, because making smaller chips allows their production lines to

churn out more chips using the same raw materials.

Nanya's sales for August rose 32 percent to NT$6.62 billion, a new all-time

high for the chip maker, the company said Tuesday.

A day earlier, Powerchip Semiconductor said its sales for August rose to

NT$8.03 billion (US$245 million), up from NT$4.45 billion in the same month

last year. The figure was also 14 percent higher than July, due to higher

prices for the chips and increased output at factories. It was the company's

fifth straight historical high.

ProMOS's sales hit NT$6.01 billion last month, up from NT$2.53 billion during

the same time a year ago, and 15 percent higher than July.

"DRAM contract and spot prices continued to rise last month, but we also

benefitted from our 90 nanometer process," said Ben Tseng, spokesman for

ProMOS.


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