A-Data Technology registered record DRAM shipments in the first quarter of 2010, according to the company. DDR3 and SO-DIMMs accounted for 25% and 60% of the company's revenues generated from DRAM modules in the quarter.
A-Data generated net profits of NT$456 million (US$14.5 million) in the first quarter, up 25% from 2009. The earnings translated into an EPS of NT$2.04 for the quarter.
A-Data chairman Simon Chen revealed the company remains optimistic about DRAM market conditions in 2010. Chen also believes the market should see a boost in the second half of this year, when major PC replacement demand is expected to take place. A-Data has seen clear visibility on orders through the third quarter, Chen added.
Chen also pointed out a combination of factors from the supply side that would cause the DRAM market to remain tight. Except for Samsung Electronics, most DRAM chipmakers now have no extra capital to build new fabs after utilizing the majority of their capex for migration to more advanced process geometries, Chen said. Longer-than-expected delivery times for immersion scanners is another issue, which may postpone the suppliers' production schedules for sub-50nm chips.
A shortage of DRAM chips has caused prices for the chip to rise, impacting PC OEMs that now have four weeks or less than a month of inventory, industry sources have indicated. Higher DRAM prices have also raised concerns that PC OEMs may tend to reduce the memory content for their cost-sensitive products.
But Chen said that PC OEM usually would keep DRAM's share of their production costs at about 10% in order to be profitable, but the rising DRAM prices may drive the proportion to 13-14% in 2010.
Chen also noted that DRAM prices are already high at present. There has been speculation that unit prices of mainstream DRAM chips may rise further to US$3.50 or even US$4.
The data show that average prices for branded 1Gb DDR3 chips arrived at US$3.03 on April 20, and the same density effectively tested (eTT) parts were traded at US$3.04. As for DDR2, a price correction continued to be seen. Spot prices for branded and eTT 1Gb DDR2 closed at US$2.84 and US$2.81, respectively, on average yesterday.