Asia Memory Makers Surge on DRAM Rebound Hopes
Shares of major Asian memory chip makers jumped on Thursday, buoyed by a strong performance in U.S. tech shares, reports of DRAM price rises and hopes that a year-long fall in computer memory prices has finally hit bottom.
In Seoul, shares in Samsung Electronics, the world's top maker of memory chips, were up 3.61 percent to 603,000 won, while Hynix Semiconductor, the world's No. 2 maker, gained 4.68 percent to 26,900 won, far outpacing the wider market's 1.15 percent rise.
In Tokyo, shares in Elpida Memory were up 10.7 percent after jumping as much as 13 percent after its president said on Wednesday prices of dynamic random memory (DRAM) chips had hit bottom, adding that prices are likely to improve in January-March.
Major DRAM makers have been locked in a waiting game as each looks to the others to cut supply amid weak prices for DRAM chips -- the memory chips that are used in personal computers.
"There seems to be some speculative buying of DRAM chips on the spot market from those who think prices have bottomed out," said M.S. Song, an analyst at CJ investment & Securities in Seoul.
"But when you look more closely there are few signs of real improvement in demand or of reduced supply."
Song pointed out that many institutional investors, who until now had been underweight in tech shares, were taking an interest in the sector.
A jump in the shares of Intel on Wednesday and other technology firms in the U.S. also boosted buying momentum.
"The strong performance of Intel reassured the market, and the recovery in DRAM prices shows a change in momentum. Globally, investment in high-tech seems to be emerging," said Tomomi Yamashita, a fund manager at Shinkin Asset Management Co. Ltd.
Taiwanese DRAM makers Powerchip and Nanya both gained nearly 7 percent on Wednesday after local media reports said the dynamic random memory chip industry saw one of its biggest price jumps in recent weeks.
Meanwhile, semiconductor price-tracking organization DRAMeXchange said in a report dated Tuesday that prices of some DRAM chips had fallen to a level which could prompt makers to finally reduce their production.
Reduced output would in turn spur price increases, DRAMeXchange said. "If prices to indeed climb upwards, a strong price rebound may be seen," it said.