Report: Taiwan DRAM firms pushing out orders

Jan. 4, 2008 – Thanks to an ongoing harsh pricing environment, major DRAM manufacturers, including Winbond and Nanya, have begun to push out equipment orders, according to a pair of reports.

Barring a “dramatic turnaround in DRAM pricing, Caris & Co. analyst Ben Pang thinks Winbond’s current expansion project could be delayed for an entire year, notes Barrons blogger Eric Savitz. DRAM capex is already expected to tank in 2008, and “there is still a high probability that earnings estimates will continue to decrease” for equipment suppliers, Pang notes (citing Applied Materials, Novellus, and Lam as being hurt by the Winbond delays), adding that “there do not appear to be positive catalysts on the horizon.”

Pang adds that his expectations for a DRAM spending slump in 2008 (-30%) are actually less severe than the Street’s consensus of a ~50% crater, with spending cuts at 2nd and 3rd-tier memory firms allowing top-tier companies to keep spending.

Digitimes also says that Nanya’s plans for a second 300mm fab is on hold pending a new plan from its board, vs. scheduled groundbreaking in 2H08. Rexchip, the Powerchip/Elpida JV which started production at its R1 300mm fab in October, is only expected to complete construction of the fab shell of its second fab (R2), according to the report, citing “industry watchers” speculation that R2 will be left idle with no equipment move-in at all in 2008. Meanwhile, ProMOS and Winbond are deciding whether to cap their production once certain levels are reached — Promos’ Fab 4 doubling to 30k WPM this year, and Winbond holding at 36k WPM, instead of an anticipated jump from 30k WPM to 50k WPM.


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