Hold on for Higher Prices for USB Flash Memory because of Apple Supplier Fire…Biggest Chip Price Rise in 3 Years.
Prices for memory chips used in smartphones and personal computers surged 19 percent, the most in three years, as SK Hynix Inc. (000660) suspended operations in China after a factory fire. Shares of the Apple Inc. (AAPL) supplier fell.
“It will take at least half a year before SK Hynix’s damaged clean room is fully rebuilt,” market
research firm TrendForce said in a report yesterday. “Such an event is likely to cause the price uptrend of PC DRAM and mobile DRAM to continue throughout” the fourth quarter.
SK Hynix, which makes half of its chips in Wuxi, held a 30 percent share of the global DRAM
market in the second quarter, following Samsung Electronics Co. (005930)’s 32.7 percent,
TrendForce said Aug. 8. Samsung rose 0.3 percent to 1,369,000 won today.
SK Hynix’s customers include Apple, Samsung, Lenovo Group Ltd., Dell Inc. and Sony Corp.,
according to data compiled by Bloomberg. Apple, Samsung, Lenovo and Sony all are releasing new flagship smartphones this year as they compete in a market estimated to be worth $280 billion, according to data compiled by Bloomberg. Apple will debut a new iPhone on Tuesday, a person familiar with the matter has said.
“We are still investigating the extent of damage,” SK Hynix said in an e-mailed statement Sept. 4. “Currently, there is no material damage to the fab equipment in the clean room, thus we expect to resume operations in a short time period so that overall production and supply volume would not be materially affected.”
according to a definition on Intel Corp.’s website.
Normal production at SK Hynix is expected to resume in about a month, Seo Won Seok, an analyst at Korea Investment & Securities in Seoul, said in a report yesterday. “The operational shutdown will cause a global PC DRAM supply shortage,” he said.
SK Hynix on July 25 posted profit that exceeded analysts’ estimates, buoyed by rising prices of
semiconductors. Second-quarter net income, excluding minority interest, rose to 946.8 billion won ($865 million) from a loss of 53 billion won a year earlier.
Lower-end smartphones will drive demand for DRAM chips in the second half, SK Hynix said in an e-mailed statement in July, and there is limited second-half supply growth for memory chips.
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