Computer Memory Makers' Shares Rise on Price Increase

Samsung Electronics Co. and Nanya Technology Corp. led computer memory chip stocks higher after Dramexchange.com said chipmakers raised prices the most in a year and a half.

Chipmakers raised prices of the benchmark dynamic-random- access memory, or DRAM, by 20 percent in July from June, the biggest increase since February last year, Taiwan-based Dramexchange, Asia's biggest spot market for the chips, said on its Web site on July 6. Nanya, Taiwan's second-largest DRAM maker, said today it raised prices as much as 20 percent.

Last week, Dramexchange predicted contract prices charged to customers would rise at least 10 percent this month. The increase fuels optimism that the glut which drove down prices more than 60 percent this year may be easing as computer makers increase chip orders ahead of the beginning of the U.S. academic year and Christmas in the second half.

``Seasonal demand should hold up chip prices in the second half,'' said Jacky Lu, who helps manage $200 million in funds at Allianz Global Investors Taiwan Ltd. in Taipei. He doesn't own stock of DRAM makers. The increase in DRAM contract prices may mean chipmakers ``will swing to profitability this quarter from the second quarter.''

Nanya, based in Taoyuan, raised prices 15 percent to 20 percent this month because of increasing third-quarter demand, spokesman Pai Pei Lin said in a telephone interview. Officials at Samsung and Hynix Semiconductor Inc. in South Korea weren't immediately available to comment.

Shares of Suwon, Korea-based Samsung Electronics, the world's largest memory chipmaker, advanced 2.6 percent to 643,000 won in Seoul, their highest close in more than seven months.

Shares Surge

In Taiwan, Powerchip Semiconductor Corp, the island's biggest DRAM maker, rose 2.2 percent, while Nanya surged 5.7 percent, the biggest one-day increase in five weeks. Shares of Inotera Memories Inc. gained 3.5 percent to close at NT$44, a record.

Shares of Micron Technology Inc., the biggest memory chipmaker in the U.S., jumped 5.1 percent, the biggest increase since November, at the end of New York Stock Exchange composite trading on July 6.

Chipmakers negotiate contract prices with computer makers including Hewlett-Packard Co. and Dell Inc. on the 1st and 16th of every month, with talks usually lasting about three days, according to Dramexchange, which typically updates prices on the sixth and 20th days of each month.

source:bloomberg.com