By Kim Yoo-chul
Staff Reporter
Hynix Semiconductor, the world’s No. 2 memory-implemented chipmaker, said on Sunday that it will hike contract prices for computer memory chips by about 15 percent in June following signs the industry slump is about to end.
``We will raise prices by about 15 percent this month, a similar level seen in May and April,’’ a high-ranking Hynix official told The Korea Times. The official, however, declined to be identified citing sensitivity over the issue.
``We are talking to our bigger clients about narrowing the differentiation on a percentage increase level and the final decision will be fixed by the second week of the month,’’ the official said.
Chip manufacturers usually negotiate their prices with PC set makers twice a month.
Outlook is still uncertain in the global chip industry as the new head of Samsung Electronics’ chip business recently clarified its earlier bold stance toward the company’s traditional moneybox.
Kwon Oh-hyun, CEO of the world’s biggest memory chipmaker, said in Taipei, Taiwan, that his company will be more aggressive, spending 7 trillion won on the memory business this year as planned.
Samsung took up 30.2 percent of the global DRAM share in terms of sales in the first three months of this year, while Hynix trailed with 18.6 percent over the same period, according to data from iSuppli. Japan’s Elpida followed Hynix with 14.5 percent.
But bigger chip manufacturers are busy raising their contract chip prices in the belief that prices will recover due to investment spending cutbacks from cash-starved late comers in the industry and increased demand ahead of the start of the new school year and the year-end shopping season.
``This year’s recovery may not be as quick as in previous years. The global chip industry should be in a demand and supply balance by the third or fourth quarter,’’ according to the Hynix official.
Samsung has raised chip prices by about 5 percent month-on-month in early May and was known to implement a similar measure in June. Elpida plans to ask its customers to pay more for profitability.
According to DRAMeXchange, Asia’s biggest on-line trading site, the average contract price of the industry’s mainstream 512-megabit double-data-rate-two chip rose 6.6 percent to $1.13 in the latter part of May up from $1.06 in early May.
``We will follow the up-trend on prices and there is room for negotiating a percentage increase,’’ the Hynix official said.
Chipmakers had invested heavily in new facilities in 2005 and 2006, hoping to gain more market share with higher expectation of Microsoft’s Window Vista operating system. But higher speculations about technical flaws in the system forced PC makers to avoid releasing such sets with the new computing system.
As a result, chip prices have fallen approximately 90 percent since early 2007, dragging down the profitability of chipmakers to below manufacturing costs.
Hynix is pitching up its efforts to solidify a strategic partnership with Taiwanese chip manufacturers in a bid to cut costs.
Last week, the government finally gave the company the green-light to transfer its distinguished memory chip processing technology to Taiwan’s ProMOS Technologies.
Thanks to the approval, ProMOS will start using the 54-nanometer technology owned by Hynix on a foundry (contract) basis to make 12-inch or 300 millimeters chips by late 2008.
Samsung and Hynix had been involved in intense ``verbal fights’’ over Hynix’s plan after Samsung’s former chip head Hwang Chang-gyu blasted Hynix’s plan by saying it was a ``technology leak’’ to competitors.