Monday, June 04, 2007


Cheap DRAM costs bad for suppliers, good for buyers. "Amid plunging prices and expanded factory output -- which is forcing some manufacturers to sell their chips below the costs to produce them -- all DRAM makers are expected to lose money this quarter for the first time since 2001, according to one semiconductor researcher (iSuppli)."
Weak prices are hurting chipmakers Micron Technology Inc. (MU) and Qimonda AG (QI), among the world's largest providers of DRAM, and pinching the order books at Applied Materials Inc. (AMAT), and Lam Research Corp. (LRCX) who supply the equipment to make DRAM chips.
Meanwhile, PC makers Hewlett Packard C0. (HPQ) and Dell Inc. (DELL) have been able to buy up cheap DRAM, which may help profit margins. Dell, for instance, posted its best gross margin in six years in the first quarter, thanks in part to low DRAM cost.

No comments: