With the DRAM glut showing no signs of abating, industry players from both upstream and downstream are all suffering from the trough. Major DRAM makers are expected to post enlarged quarterly losses in the first quarter and more memory module makers are expected to go bankrupt.
Already seeing combined losses of about NT$25 billion (US$83.3 million) in the fourth quarter of 2007, the four major DRAM makers in Taiwan – Inotera Memories, Nanya Technology, ProMOS Technologies and Powerchip Semiconductor Corporation (PSC) – are expected to see their combined losses in the first quarter hit NT$30 billion.
Of which, industry players noted that PSC should have monthly losses averaging at about NT$5 billion, whereas Nanya and ProMOS should see monthly losses of about NT$2 billion each. Inotera is also estimated to post a quarterly loss of NT$4.5 billion.
While the upstream seems to have no signs of a turnaround in sales yet, speculations are still circulating in the market in Taiwan that more DRAM module makers will go bankrupt, especially when Lih Duo International, a memory module OEM, is said to have failed to meet payments earlier, the industry players said. Those who are said to be in risk of bankruptcy are not just limited to small players, but also publicly listed companies, they noted.
Given that the business scale of memory modules is relatively small, the DRAM price plunge has put further pressure on industry players. The global credit crunch has also worsened the situation, as banks are reluctant to lend more money to memory module makers. The industry players noted that more news about bankrupt DRAM module makers should surface in April, as most payments in the first quarter are due in March.
Article translated by Esther Lam
