DRAM stocks ex­tend gains on an­tic­i­pated strong de­mand

The China Post - - TAIWAN BUSINESS -

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

Three Quarters

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.

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