Chip Makers Benefit from DVD Format War
Published by Admin on 16.9.06 at 9/16/2006 01:17:00 PM.
Sony and Toshiba are fighting to set the industry standard for the next generation of DVD players, but the spoils may go to makers of memory chips, like Samsung Electronics.
The home theater industry's biggest format war in two decades, pitting Sony's Blu-ray system against Toshiba's HD DVD technology, will increase demand for dynamic random access memory semiconductors, or DRAMs, which until now have been mainly used in personal computers. The new DVD players use about 16 times as much memory as current machines.
Shipments of high-definition players will climb to 6.2 million next year from 800,000 this year, according to the research firm Isuppli, creating a new income stream for Samsung and Hynix Semiconductor, both of South Korea, and Micron Technology, of Boise, Idaho. That may set the stage for a stock rally in the $26 billion DRAM industry, once consumers choose a victor in the format fight, said Yoo Jung Sang of PCA Investment Trust Management in Seoul.
"DVDs are definitely a promising market," said Yoo, who is PCA's chief investment officer. "But issues regarding the standard need to get resolved first."
Yoo, who owns Samsung and Hynix shares, said that he was bullish on memory-chip stocks, even though the DVD format battle might retard growth in DRAM sales for the machines by as long as three years. Link
The home theater industry's biggest format war in two decades, pitting Sony's Blu-ray system against Toshiba's HD DVD technology, will increase demand for dynamic random access memory semiconductors, or DRAMs, which until now have been mainly used in personal computers. The new DVD players use about 16 times as much memory as current machines.
Shipments of high-definition players will climb to 6.2 million next year from 800,000 this year, according to the research firm Isuppli, creating a new income stream for Samsung and Hynix Semiconductor, both of South Korea, and Micron Technology, of Boise, Idaho. That may set the stage for a stock rally in the $26 billion DRAM industry, once consumers choose a victor in the format fight, said Yoo Jung Sang of PCA Investment Trust Management in Seoul.
"DVDs are definitely a promising market," said Yoo, who is PCA's chief investment officer. "But issues regarding the standard need to get resolved first."
Yoo, who owns Samsung and Hynix shares, said that he was bullish on memory-chip stocks, even though the DVD format battle might retard growth in DRAM sales for the machines by as long as three years. Link