Adata Technology Co (威剛科技), the world’s second-largest memory module supplier, expects DRAM contract prices to rebound in the next two months, thanks to seasonal demand for memory chips used in smartphones and data centers.
Coupled with improving demand for NAND flash memory chips, that should help Adata ride through the worst period in terms of profitability, the company said on Thursday.
DRAM products contributed 49 percent to the company’s revenue of NT$14.04 billion (US$447 million) in the first seven months of this year, while NAND flash memory chips and solid-state drive storage accounted for 51 percent, the company said.
“Adata’s operation hit the trough in the second quarter. Revenue should pick up month-on-month in the third quarter,” Adata chairman Simon Chen (陳立白) told reporters on the sidelines of a news conference to unveil its strategic business partnership with Seoul-based Lotte Foods Co.
Due to the weakness in DRAM prices, the company reported operating losses of NT$199 million in the second quarter, compared with losses of NT$196 million in the same quarter a year ago.
The company expects DRAM contract prices to rise next month and in October, driven by improving demand for chips used in smartphones ahead of new model launches and the Christmas shopping season, Chen said.
Demand for memory chips used in data centers is also expected to pick up in October and November, as data center operators plan to ship as many products as possible before a 10 percent tariff on US$300 billion of Chinese imports take effect in December, he said.
The rise in DRAM contract prices is expected to trigger a price hike in the spot market in October, Chen said.
DRAM spot prices have seen a short-term correction lately, after a 40 percent surge in the first half of the year, he said.
Adata’s forecast is relatively optimistic compared with market researcher TrendForce Corp (集邦科技), which expects DRAM prices to continue a downtrend given high inventories.
Mainstream PC DRAM prices dropped another 10 percent last month, after plunging 30 percent sequentially in the second quarter, the market researcher said.
Nanya Technology Corp (南亞科技), the nation’s biggest DRAM maker, also expects DRAM prices to continue falling this quarter, albeit at a slower pace, as a seasonal rebound in end-market demand for computers, mobile phones, consumer electronics and servers should help underpin DRAM shipments.
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