DRAM stocks extend gains on anticipated strong demand
Shares of local dynamic access random memory ( DRAM) chip suppliers were up Tuesday morning amid optimism that global demand will be strong in 2015 as the electronics sector gears up for the Internet of Things (IoT, ), dealers said. Hopes of growing global demand for DRAM chips have also been raised by speculation that Apple Inc. will upgrade the memory capacity of its iPhones and iPads, which is expected to boost DRAM sales, they said.
Foreign institutional buying in select stocks on Monday also boosted interest by reinforcing local retail investors’ confidence in increasing their holdings in these stocks, dealers said.
As of 11:07 a.m., shares of Win- bond Electronics Co. ( ) had added 3.30 percent to NT$10.95 (US$0.35), with 133.95 million shares changing hands, shares of Inotera Memories Inc. ( ) had risen 1.60 percent to NT$50.80, and shares of Nanya Technology Corp. ( ) had gained 0.77 percent to NT$78.60.
The weighted index on the Taiwan Stock Exchange was down 0.07 percent at 9,280.24.
“Buying today and yesterday showed that investors have turned upbeat about the DRAM business on hopes that efforts to develop devices for IoT use will boost the memory chip industry next year,” Asia Securities Investment Consultant analyst Chang Chih-cheng said.
The IoT refers to devices of all types, such as security monitors, vacuum cleaners and mobile phones, connected to the Internet and to each other, to create a more interconnected user experience.
Wibond on IoT Business
Winbond is one of the Taiwanese DRAM chip suppliers that have announced its efforts to take advantage of the growing IoT business.
The company said it is working with U.S.-based DRAM supplier Micron Technology Inc. to develop memory chips, targeting automotive electronics, wearable devices and gadgets used in smart home applications, all of which are part of the IoT arena.
TrendForce Corp. ( ), a Taipei-based market informational advisory firm, said Apple will increase the memory capacity of its iPhones and iPads next year, and flagship models of other international brands will follow suit, which could double DRAM sales in 2015.
The market widely expects major domestic DRAM suppliers, such as Nanya and Inotera, to remain profitable.
Inotera EPS NT$5.31 in First
In the first nine months of this year, Inotera posted NT$5.31 in earnings per share, compared with NT$1.78 recorded a year earlier, Nanya recorded NT$8.63 in EPS, up from NT$1.98, and Winbond registered NT$0.55 in EPS, up from NT$0.04.
“I expect that global DRAM demand will grow significantly next year,” Chang said. “Strong foreign institutional buying in shares of Inotera was evidence of the faith foreign investors have in the sector.”
According to the TWSE, foreign institutional investors bought a net 13.41 million Inotera shares Monday.
“I expect Winbond shares will have more room to grow as the stock is still lagging behind other DRAM stocks at the moment,” Chang said.
“I am also upbeat that Winbond’s bottom line will be further strengthened by the major effort it’s invested in developing specialty DRAMs.”
Chang said Winbond shares could face some technical resistance as the stock moves closer to NT$12 in the near future.
This photo shows a giant statue of “A Super Mousy” on display in front of the T.S. Dream Mall in Tainan, yesterday. Tainan City’s T.S. Dream Mall ( ) unveiled a giant 10-meter high statue of “A Super Mousy” ( ). The statue managed to attract a lot of attention from locals and visitors hoping to snap a picture together with the department store mascot.