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Silicon Motion Technology Corp. Message Board

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  • garmingchan garmingchan Mar 30, 2007 11:34 PM Flag

    IBD Article

    That could hurt his business, he
    says, because fast-rising prices
    coulddampensales of flash devices.
    Silicon Motion�s per-share profit
    rose steadily in 2006. Its shares
    have risen 82% since July, but they
    fell 13% last week partly on at least
    one report, by Oppenheimer, that
    flash prices rising and flash chips
    are in short supply.
    Kou says he�s worried because
    he�s heard that the big flash makers
    are in short supply.
    �TherehasbeenarumorthatSamsung
    and Hynix have constrained
    capacity of flash,� he said. �It seems
    like we�re starting to see flash prices
    going up. I�m not sure whether it
    will last a whole quarter or halfyear
    or a short period of time.
    �I�m going to Korea and check
    with Hynix and Samsung to see
    what�s going on,� hesaid Tuesday.
    On Thursday, Oppenheimer analyst
    Vijay Rakesh downgraded Silicon
    Motion from buy to neutral. He
    says supply issues mean that if flash
    card makers can�t get enough flash,
    they�ll have less need to buy Silicon
    Motion�s controller chips.
    �Samsung is having manufacturing
    issues,� Rakesh said in an interview.
    �It�s yield issues. They were
    planning to go to 51-nanometer
    (next-generation chipmaking process)
    during the first quarter. Now
    they plan to make the move in third
    quarter. As a result, there�s not
    enoughsupply.�
    But Montgomery analyst Robert
    Adamsdisagrees.
    �To say there�s a fundamental
    issue with supply in the Nand-flash
    base is ludicrous,�Adamssaid. �Capacity
    was artificially manipulated
    to firm pricing during a weak first
    quarter.�
    Such manipulation, to a degree, is
    par for the course in chip production.
    Samsung�s Elliott confirms the
    company shifted some capacity
    from flash toDRAMsbecause profit
    margins onDRAMshad risen.He
    says that�s part of the natural cycle
    in the memory chip game, andNam
    Hyung Kim, an analyst for market
    research firm iSuppli, agrees.
    �Around 5% of the global DRAM
    unit growth (in the first quarter)
    came from a shift from Nand to
    DRAM,� Kim said. �We expect
    until fourth quarter,DRAMmargin
    will surpass Nand.
    �Nand (prices) have hit the bottom.
    I expect they will recover, but
    at what rate we�ll have to wait and
    see.�

 
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