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News Center Company News
Rock-Bottom Prices Result in Huge Loss to DRAM Makers
  Taipei, Sept. 4, 2008 (CENS)--Taiwan`s DRAM chipmakers expected their operating losses to rise further in the second half this year due mainly to continuous price collapses of the computer memory chips worsened by post-Olympics economic downturn assumption and massive dumps of the chips on the market by leading suppliers.

With these disadvantageous factors, prices of DDR2 1Gb eTT DRAM chips have nosedived over 20% in a month to record lows. In light of the gloomy future of the market, many institutional investors have issued bearish forecasts and slashed investment ratings on DRAM stocks.

Most of Taiwan`s DRAM chipmakers have suffered three consecutives quarters of losses, with the total losses of the entire industry exceeding NT$100 billion (US$3.2 billion at US$1:NT$31).

Some chipmakers have slowed down capital-expenditure plans, but urgent pressure to pay off bank loans and redeem corporate bonds that are to mature soon has pushed some chipmakers to dump products on the market for cash, further pushing the prices down. For instance, PowerChip Semiconductor Corp. (PSC) has redeemed NT$9 billion (US$290 million) worth of bonds.

Online market clearinghouse DRAMeXchange pointed out that many contract suppliers of personal computers had cancelled orders for DRAM chips while managing to lower inventory backlogs.

Industry watchers noted that operating loss has made the face value of many of the island`s DRAM stocks fall under the NT$10 baseline, prompting creditor banks to tighten loans to the chipmakers.
release time :9/5/2008
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