Taiwan's five big DRAM makers see sales pick up

15.09.2009
Taiwan's five largest DRAM makers continued to report big losses in the second quarter but the results marked a rebound from the first quarter and August sales showed even more improvement as DRAM prices kept moving higher.

DRAM prices have risen slowly but steadily since hitting bottom in mid-December of last year. The price of the most popular variety of DRAM, 1GB DDR2 (double data rate, second generation) DRAM, has soared 132.4 percent since the beginning of this year, according to investment bank Credit Suisse, and is up 55.7 percent in the third quarter alone.

Rising prices helped push August revenues much higher for Taiwanese DRAM makers, which continue to struggle to repay debt and restructure.

"DRAM selling prices have steadily risen and Powerchip has gradually increased production, resulting in a significant increase in sales revenue for August," said Eric Tang, a vice president at Powerchip Semiconductor in Taipei.

Taiwan's five biggest DRAM makers reported combined revenue of NT$12.30 billion (US$378.4 million) in August, up 18.6 percent from July's NT$10.37 billion. Revenue for the companies has steadily increased since hitting lows in the first quarter.

The companies over-invested in new factories when the market was hot a few years ago and loans were easy to get, but paid the price with a two-year DRAM glut that sent chip prices down well below profitable levels. The Taiwan government has had to intervene with banks to delay loan repayments for the companies, and it even set up an entity to restructure the industry, Taiwan Memory Company (TMC).