SEOUL (Reuters) – Memory chip, and spot prices have risen for the first time this year, with an indication of the grim warnings of a “never-before-seen” spikes and supply interruption can be carried out as a dispute between South Korea and Japan are improving.
FILE PHOTO: the Memory of the chip and parts of the united states memory-chip maker, MicronTechnology are shown at their fair booth at the industrial trade fair in Frankfurt, Germany, on July 14, 2015. REUTERS/Kai Pfaffenbach/File Photo
The 15% surge in the DRAM-chip prices for about a week in an industry dogged by oversupply and weak demand for more than a year after Japan, it has tightened curbs on exports of some of the chipmaking materials from South Korea, the home of the world’s top two memory chipmakers, Samsung (005930.KS) and SK Hynix Inc. (000660.ME).
To be honest, the boom is indicated by industry tracker DRAMeXchange, refers to the spot market only account for less than one-tenth of the memory chip in the landscape, as most of the big tech companies are a source of middle – term and long-term contracts.
Given this backdrop, high-profile clients, such as iPhone-maker Apple (AAPL.D) it has not yet started with the construction of the stock, but the price increase has started to feed on the fear that Japan and the pavement will soon impact the delivery, and various resources in the industry, he said.
“If the ban goes through, the memory prices will skyrocket like they never have before, with 75% of that of DRAM, and 45% of RESPECTIVELY the world-wide production is at risk,” by Mark Newman of Bernstein said, referring to South Korea’s dominance in the supply of memory chips.
A person at the South Korean chipmaker said customers were in the following situation closely,” but will “take a wait-and-see approach, and if the demand continues to be weak”.
Samsung electronics and SK Hynix declined to comment.
“We have contingency plans if the impact occurs,” according to a spokesperson for the police in Digital camera models, Sony Corp’s (6758.T) is the spin-off.
“The options are to look for an alternative chip suppliers outside of South Korea,” she said, adding the business to the Japanese based computer maker did, however, have not yet been made.
Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), the world’s top contract chipmaker, has warned that japanese exports to the curb, it is “the biggest uncertainty” for the fourth quarter of the year.
Japan has also tightened curbs on exports of the three chipmaking materials, fluorinated polyimides are used in smartphone displays; photoresists are used for transfer of circuit patterns on the semiconductor wafers; and hydrofluoric acid, is used as an etching gas, with the advantage of the team.
In south Korea, came to 94 percent of fluorinated polyimides, 92% of the photoresists, and is approximately 44 percent hydrogen fluoride and from Japan in the first five months of this year, the south Korean industry, the data showed.
Seoul, korea, has said that he wants to make the whole supply chain, become more independent, and it is getting fresh offers from Russia and China, and to provide the hydrogen fluoride.
Local media reported that South Korea is considering lowering the import duties on these products from other countries to fill in any gaps in the coverage.
“We … we know some chip and module manufacturers to reduce their bids, or the announcement to stop the production in the light of the physical constraints …,” research firm TrendForce said.
In NAND flash market, the demand has also been hurt by an output to stop the japanese Toshiba-Memory from the previous month, due to a power outage.
A person in the Toshiba’s Memory, said the plant resumed operations in mid-July, but it will take a long time for shipments to make a full recovery and that the company still has to catch up with existing orders.
A real estate broker, UBS said this week, expects the NAND flash contract chip prices to fall about 5% in the third quarter, less than an earlier forecast for a 10% quarter-on-quarter drop, with an indication of the Toshiba’s output is cut, and Japan’s export curbs. At least it was a projection of a 17% drop in DRAM contract prices will remain unchanged.
NAND flash chips are used in mobile devices such as memory cards, USB flash drives and solid-state drives, while the DRAM is used to support electronic devices of a wide variety of tasks.
The clear winners of the best chip would be the prices, Micron, Toshiba, and Nanya, and Western Digital), Bernstein’s Newman said.
FILE PHOTO: a Mobile memory chips are made by chipmaker SK Hynix can be seen in this picture illustration in Seoul, south korea, May 10, 2013. (REUTERS photo/Lee Jae-Won/Picture/File Picture
“Samsung electronics and SK Hynix, while the pain of the production, it would also have the benefit of significantly higher prices and, ironically, it will probably still be net winners,” he added.
Shares of Micron have risen by 12% since Japan announced the export of the pavement on the 1st of July, while Western Digital Corp (WDC.(O) and SK Hynix have also gained 8% and 7%, respectively. Taiwan’s Nanya Technology (2408.MODEL is 5% higher.
Samsung’s shares, however, have dipped 2% over the period, hurt by its forecast for a 56% plunge in second-quarter earnings due to tumbling memory chip prices.
Reporting Heekyong Yang, and Ju-min Park in SEOUL, south korea, Makiko Yamazaki in TOKYO, japan, Sijia Jiang, HONG-KONG, Yimou Lee in TAIPEI; Writing by Miyoung Kim; Editing with the ipad, Himani