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January 13, 2011, 2:27 AM EST
By Jun Yang
(Updates with closing share prices in sixth paragraph.)
Jan. 13 (Bloomberg) -- Nanya Technology Corp., Taiwan’s second-largest maker of computer-memory chips, may sell its stake in Inotera Memories Inc. to Micron Technology Inc., a move that will herald an industry reorganization, an analyst said.
There was “contact” between officials from Micron and Formosa Plastics Group, Nanya’s parent, that probably took place late last year, Kim Chang Yeul, an analyst at Mirae Asset Securities Co. in Seoul, said by telephone today. Kim cited people with knowledge of the matter.
Inotera is a venture between Nanya and Micron. Charles Kau, president of the Taoyuan, Taiwan-based venture, said he wasn’t aware of any talks. Nanya Chairman Wu Chia-chau denied any discussion. Daniel Francisco, a spokesman for Boise, Idaho-based Micron, declined to comment.
The three companies are among computer-memory makers facing pressure to keep up with the estimated $10 billion that Samsung Electronics Co. invests annually to widen its market lead as falling prices squeeze profitability of each chip. Prices of dynamic random access memory, or DRAM, used in personal computers dropped 60 percent last year as PC demand weakened, according to figures from Dramexchange Technology Inc.
“When everyone’s attention is on how much further prices would drop before they stop falling, companies with weak cost structures, technologies and financing abilities are beginning to reconsider the business itself,” Kim wrote in a report today. He didn’t specify other companies that may undergo consolidation.
Shares Gain
Nanya rose 1.9 percent to NT$16.55 at the 1:30 p.m. close of trading in Taipei, and Inotera gained 1.3 percent to NT$16.25. Taiwan’s Taiex index added 0.1 percent. Micron advanced 7.1 percent to $9.34 in Nasdaq Stock Market trading yesterday.
Elpida Memory Inc. may buy shares of Taiwanese chipmakers to counter competition from Samsung, Yukio Sakamoto, president of the Tokyo-based company, said in October.
The price of the benchmark DDR3 1-gigabit DRAM fell about 47 percent in the fourth quarter, according to data from Taipei- based Dramexchange, operator of Asia’s largest spot market for semiconductors.
Global PC shipments rose 2.7 percent in the fourth quarter, missing an earlier projection of 5.5 percent, as consumers held back on holiday purchases and chose Apple Inc. iPads over desktop and notebook computers, Framingham, Massachusetts-based IDC said yesterday.
Memory-chip prices may start rising this quarter as computer makers restock parts before rolling out new models featuring Intel Corp.’s latest chip design, according to Kim Young Chan, an analyst at Shinhan Investment Corp. in Seoul.
--With assistance from Ian King in San Francisco, and Tim Culpan and Yu-Huay Sun in Taipei. Editors: Lena Lee, Chua Kong Ho.
To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.
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(Updates with closing share prices in sixth paragraph.)
Jan. 13 (Bloomberg) -- Nanya Technology Corp., Taiwan’s second-largest maker of computer-memory chips, may sell its stake in Inotera Memories Inc. to Micron Technology Inc., a move that will herald an industry reorganization, an analyst said.
There was “contact” between officials from Micron and Formosa Plastics Group, Nanya’s parent, that probably took place late last year, Kim Chang Yeul, an analyst at Mirae Asset Securities Co. in Seoul, said by telephone today. Kim cited people with knowledge of the matter.
Inotera is a venture between Nanya and Micron. Charles Kau, president of the Taoyuan, Taiwan-based venture, said he wasn’t aware of any talks. Nanya Chairman Wu Chia-chau denied any discussion. Daniel Francisco, a spokesman for Boise, Idaho-based Micron, declined to comment.
The three companies are among computer-memory makers facing pressure to keep up with the estimated $10 billion that Samsung Electronics Co. invests annually to widen its market lead as falling prices squeeze profitability of each chip. Prices of dynamic random access memory, or DRAM, used in personal computers dropped 60 percent last year as PC demand weakened, according to figures from Dramexchange Technology Inc.
“When everyone’s attention is on how much further prices would drop before they stop falling, companies with weak cost structures, technologies and financing abilities are beginning to reconsider the business itself,” Kim wrote in a report today. He didn’t specify other companies that may undergo consolidation.
Shares Gain
Nanya rose 1.9 percent to NT$16.55 at the 1:30 p.m. close of trading in Taipei, and Inotera gained 1.3 percent to NT$16.25. Taiwan’s Taiex index added 0.1 percent. Micron advanced 7.1 percent to $9.34 in Nasdaq Stock Market trading yesterday.
Elpida Memory Inc. may buy shares of Taiwanese chipmakers to counter competition from Samsung, Yukio Sakamoto, president of the Tokyo-based company, said in October.
The price of the benchmark DDR3 1-gigabit DRAM fell about 47 percent in the fourth quarter, according to data from Taipei- based Dramexchange, operator of Asia’s largest spot market for semiconductors.
Global PC shipments rose 2.7 percent in the fourth quarter, missing an earlier projection of 5.5 percent, as consumers held back on holiday purchases and chose Apple Inc. iPads over desktop and notebook computers, Framingham, Massachusetts-based IDC said yesterday.
Memory-chip prices may start rising this quarter as computer makers restock parts before rolling out new models featuring Intel Corp.’s latest chip design, according to Kim Young Chan, an analyst at Shinhan Investment Corp. in Seoul.
--With assistance from Ian King in San Francisco, and Tim Culpan and Yu-Huay Sun in Taipei. Editors: Lena Lee, Chua Kong Ho.
To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.
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