Alexa
  • Directory of Taiwan

DRAM stocks rise on upbeat Q2 outlook; Micron gains

DRAM stocks rise on upbeat Q2 outlook; Micron gains

Taipei, Jan. 21 (CNA) Local dynamic random access memory (DRAM) stocks generally moved higher Wednesday morning on expectations that demand will stabilize in the second quarter after the traditionally slow first quarter, dealers said. Investors were also encouraged to buy into DRAM stocks after U.S.-based counterpart Micron Technology Inc. rose more than 2 percent in the United States overnight, they said. As of 11:05 a.m., Nanya Technology Corp. (???) had added 1.43 percent to NT$77.90 (US$2.47), with 8.73 million shares changing hands, while DRAM module maker Apacer Technology Inc. (??) had risen 0.92 percent to NT$92.90. Inotera Memories Inc. (???), however, was down 1.33 percent at NT$44.60, off an early high of NT$46.00, as investors locked in gains posted a session earlier. The weighted index on the Taiwan Stock Exchange was up 0.45 percent at 9,292.94. "These DRAM stocks have been in consolidation mode for a while amid worries about slow season effects in the first quarter," Taishin Securities Investment Advisory analyst Tony Huang said. "The latest Trendforce report on market conditions in the second quarter prompted investors to hunt bargains." In a research report, DRAMeXchange, a memory chip research unit of Taiwan-based market information advisory firm TrendForce, said the DRAM market is poised to recover in the second quarter as major smartphone brands unveil new products, boosting DRAM shipments. As a result, the research report said, DRAM prices will gradually stabilize after showing seasonal weakness in the first quarter, which should benefit DRAM makers' bottom lines. Even the first quarter may be better than expected, DRAMeXchange said, because prices quoted for commodity DRAMs for January have fallen less than 6 percent from a month earlier, and specialty DRAM prices have remained stable and even risen slightly. Echoing the report, Apacer said the DRAM market remains healthy, and the company expected DRAM prices to stabilize in the second quarter and momentum to continue for the rest of the year. "It seems that investors feel relieved and are raising their DRAM holdings at this time. And the current buying also reflected the rise in the share price of Micron," which has close business ties with Nanya and Inotera, Huang said. Inotera is a joint venture between Micron and Nanya. Shares of Micron gained 2.35 percent overnight after Susquehanna Financial Group upgraded a recommendation on the stock to "positive" from "neutral." The advisory firm said that Micron is likely to see its DRAM gross margin improve on stable demand. "There is no doubt that major DRAM suppliers, such as Nanya and Inotera, will report positive earnings for 2014. I think that they will remain profitable in 2015, although their earnings growth could moderate," Huang said. According to Gartner, DRAM sales are expected to grow 7.7 percent in 2015, compared with 31.7 percent year-on-year growth recorded in 2014. (By Jackson Chang and Frances Huang)


Updated : 2021-09-18 20:42 GMT+08:00