Jan. 28, 2008 – Nanya and Inotera both forecast a global recovery in DRAM gaining steam by 2Q08 that will lead to tighter supplies of memory chips in the second half of the year, according to local press reports.

Nanya execs, seeing contract prices bounce following a spot-market rebound at year’s end spurred by lower inventories, project a “moderate” increase this quarter, speeding up to a >40% surge of 1Gb DDRII ASP to $2.50-$3.00 sometime in 2Q08, notes the Taiwan Economic News. Behind the surge is anticipated expansion of PC memory capacity ahead of a planned mid-Feb. rollout of an updated Microsoft Vista OS. Spokesperson P.L. Pai noted that many DRAM customers have been negotiating orders for delivery in 2H08, signaling a coming recovery. He also noted that PC OEMs spent less on DRAM in 2007 because of higher prices for panels and batteries, noted Digitimes.

Nanya’s JV, Inotera Memories, also pegs a surge in ASPs happening in 2Q08, though the recent rise is more attributed to inventory build for the Chinese New Year, the paper notes. Company president Charles Kao said the forecasted 2Q rebound will be caused by supply shortages, attributed to industrywide phaseouts of 200mm fabs due to costs and 300mm expansions.

Despite optimism of a 2H rebound, both Nanya and Inotera are cutting their capex this year: Nanya budgeting roughly $1.2B, down -15% from 2007, while Inotera will slash spending by nearly a third to ~$937M, both companies mainly focusing on 300mm/70nm capacity expansions, the paper notes.

Nanya posted a 4Q07 loss of US$252.7M on $320.8M in sales, and Inotera suffered $113.2M in losses on $311.2M in sales. But Inotera’s Kao, cited by Digitimes, said he thought even a slight uptick in ASPs could mean a swing to profitability in 1Q08, as some of a $30M inventory writeoff in 4Q could be cancelled.