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Buyers warned over DRAM price hikes

Taiwanese memory makers report record sales

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 component, such as microprocessors. But users who want 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 Windows Vista. That could keep prices for DRAM high.

Today's spot price for the most widely used DRAM, 512Mb DDR2 (double data rate, second generation) chips, is around $6 (about £3), 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 ramping up efforts to use 90nm (nanometre) 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$6.62bn (£106m), a new all-time high for the chip maker, the company said today.

A day earlier, Powerchip Semiconductor said its sales for August rose to NT$8.03bn (£129m), up from NT$4.45bn (£72m) 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$6.01bn (£97m) last month, up from NT$2.53bn (£41m) during the same time a year ago, and 15 percent higher than July.

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