Nanya shares soar on hopes for mobile DRAM demand


TAIPEI–Shares of Nanya Technology Corp. (�n�Ȭ�), one of Taiwan’s major dynamic random access memory (DRAM) chip makers, moved sharply higher Wednesday morning on hopes that strong demand for mobile DRAMs from China will boost the company’s bottom line, dealers said.

Buying in Nanya shares also spread to shares of another Taiwanese DRAM supplier, Inotera Memories Inc. (�بȬ�), helping the memory sector outperform the broader market, which came under pressure Wednesday.

As of 1:19 p.m., shares of Nanya had added 3.08 percent to NT$63.60 (US$2.09), off a high of NT$65.1, with 7.37 million shares changing hands. Shares of Inotera had risen 0.45 percent to NT$33.85, off a high of NT$34.70.

The weighted index on the Taiwan Stock Exchange was down 0.51 percent at 9,667.17.

The two stocks are the DRAM manufacturing arms of the Formosa Plastics Group (�x�춰��).

��Nanya has shifted much of its capacity to mobile DRAM production. As the global personal computer market remains slow, solid specialty mobile DRAM demand is offsetting the impact of falling demand for commodity DRAMs,�� Ta Ching Securities analyst Andy Hsu said.

According to Ta Ching Securities, mobile DRAMs account for more than 60 percent of Nanya’s total sales following the company’s efforts to diversify its product mix.

Hsu said hopes for mobile DRAM demand were raised by reports in Taiwanese media saying that low to mid-range smartphone vendors in China have placed large orders with Nanya in recent weeks for LPDDR2 DRAMs.

The reports said the price of 4Gb LPDDR2 DRAMs for mobile device use ranged between US$2.7 and US$2.9, while Nanya’s production costs for those DRAMs made with its 30 nanometer process is lower than US$2.

The peak season for the LPDDR2 DRAMs will kick off in June, when the chip’s price is expected to rise to above US$3, and Nanya should be one of the major beneficiaries, the reports said.

��Nanya shares had been in consolidation mode for some time. The positive leads indicating strong mobile DRAM demand prompted investors to pick up Nanya shares today,�� Hsu said.

Before Wednesday’s strong showing, shares of Nanya had fallen more than 21 percent since the beginning of April.

��But investors should remain alert to plans made by South Korean producers to expand their capacity later this year and maybe cut product prices to secure more orders,�� Hsu said.

��Nanya and Inotera are likely to face headwinds then.��

Hsu said that it was possible for Nanya shares to encounter technical resistance at NT$68-70, while Inotera shares could see a cap at NT$36-38 in the short term.