Skip to main content

Turnaround in the the DRAM sector? What might that imply?

As I often do, I was looking through the Digitimes web site to see what was going on in the semiconductor industry. To my surprise, there were a number of articles that imply the DRAM sector is in the process of turning around.

Let's just list the headlines as quoted from Digitimes:
  • Rising chip prices may undermine Taiwan Memory - Taiwan downstream DRAM makers are saying that the leading DRAM vendors, Samsung Electronics, Hynix Semiconductor, Micron Technology and Elpida Memory, are no longer tolerating low chip quotes, and will aim to push chip prices upward soon... Data compiled by DRAMeXchange showed that sport prices for mainstream 1Gb DDR2 chips soared 4% to US$0.88 on March 24 and then hiked over 13% to US$1 on March 26... industry sources have commented that the higher DRAM chip prices are, the lower the chances that the Taiwan government will go ahead with its proposal to establish Taiwan Memory Company.
  • DRAM suppliers may increase quotes due to rising demand, sources say - Samsung Electronics, Hynix Semiconductor and Elpida Memory may raise DRAM quotes as demand from major memory module makers is increasing significantly
  • DRAM spot prices surge on fab shutdown speculation, says inSpectrum
  • PSC chairman says DRAM shortage will occur in 3Q - during a press conference held yesterday (March 25) Frank Huang, chairman of Powerchip Semiconductor Corporation, said that the DRAM chip sector will experience a substantial shortage in the third quarter of 2009 at the earliest, due to suppliers' production cutbacks as well as a warming up of demand
The DRAM sector has been probably the most beaten down area in the semiconductor industry. Suppliers insisted on adding capacity even as prices dropped, causing a glut of product and a decline in margins. Companies like Micron Technology (MU) have gone quarter after quarter without posting a profit. DRAM chips have become simple commodities despite the fact that they are important building blocks for PCs, cell phones, mobile Internet devices and various other consumer and enterprise electronic products.

So if this sector that couldn't seem to do anything right is surging, what does that imply for the overall hardware sector?

If DRAM chips are in demand, someone must be building products to put them in. Is this merely a replenishment of depleted inventory or are we seeing the stirrings of a recovery in the hardware sector?

I've said in the past that tech would be first to recover from this recession. Let's hope this is the real thing and not a head fake. All we can do for now, though, is keep an eye on this and see if these early stirrings lead to something more.

Disclosure: none
Labels:

Comments

Post a Comment

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation
4 comments
Read more

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve
1 comment
Read more

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional
4 comments
Read more