DRAM Prices Could Rebound in Q1

The beleaguered DRAM memory chip business, hurt by slowing PC and consumer electronic sales, declining production, and falling prices, is showing new signs of industry-wide bailout packages, several observers note Tuesday. Monday came news of the $845 million, approximately, of aid to Qimonda (QI), which has been faced insolvency for much of this year.

Tuesday comes word from trade pub EE Times that South Korean DRAM maker Hynix Semiconductor (000660.KS) will receive $598 million in new loans from a top shareholder, Korea Exchange Bank, citing the Bank. Meantime, EE Times points out that Taiwanese DRAM maker Powerchip Semiconductor has applied to its government for assistance.

EE Times points out that only Samsung (SSDIF.PK) is financially safe among the large DRAM makers, and that consolidation is looming in the industry. “Powerchip spokesman Eric Tang said Japan’s Elpida was set to deliver a plan for a possible technology tie-up with the Taiwanese firm by the end of this week,” the paper reports.

If there’s any silver lining, it’s that DRAM makers are cutting production left and right to reduce industry inventory. EE Times reports in a separate story that “Spot prices for DRAM chips are on the rebound thanks to production cuts by several vendors,” and it cites market research firm DRAMeXchange as prognosticating that “the contract DRAM price may bottom out in the first quarter of 2009, but upside momentum will be “comparatively weak.”

Micron Technology (MU), which is to report earnings after the close Tuesday, is down 28 cents, or 10.7%, at $2.33. Qimonda is down 8 cents, or 19%, at 34 cents.