Quake pushes SDRAM prices up by 50 per cent

The disruption to the Taiwan semiconductor industry brought by the devastating earthquake has led SDRAM (synchronous dynamic random access memory) prices to rise by 50 per cent in the global market, according to a semiconductor trader.

Prior to the earthquake, which struck Taiwan in the early hours of September 21 and measured 7.6 on the Richter scale, the wholesale price for 8MB of SDRAM stood at $US13, said Eric Leung, sales manager of Tec-Hill, a local trading house for semiconductors that targets international markets including the US, Asia-Pacific and Europe.

While destruction of the manufacturing facilities in the Hsinchu Science Park and other areas in Taiwan remains to be assessed, power outages throughout the island have brought production to a halt.

"In the afternoon of the day that the quake hit, the price of SDRAM rose quickly to $US15 due to several factors, including the expectation of a supply shortage and speculation by certain industry players," said Leung. The new price represented a 15 per cent increase over the price on 20 September.

Leung estimated that Taiwan manufactures about 50 per cent of the world's SDRAM supply, while Japan and Korea account for 30 per cent and 20 per cent, respectively. The production shutdown in Taiwan led to a considerable shortage of SDRAM and thus had a domino effect in pulling the price up globally, benefiting the other two SDRAM-producing countries, he said.

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