Memory device suppliers Kingston Technology and Nanya Technology both expect the supply of DRAM chips to fall short of demand in the third quarter of 2014 due largely to effects of peak season.

　　However, despite seasonal fluctuations, prices of DRAM chips are expected to remain relatively stable following the recent industry consolidation that limits the number of suppliers to merely three, according to Kingston.

　　Kingston declined to comment on recent market rumors indicating that SK Hynix was having a machinery installation issue which has affected the supply and prices of memory chips, but said prices will be definitely trending upward in the third quarter.

　　Meanwhile, NAND flash chips are also expected to enjoy brisk sales in the second quarter as handset vendors will build up their inventories for new models to be released in the second half of 2014, Kingston added.

　　Nanya has seen a pick-up in orders from clients recently and believes that demand in the second quarter of 2014 will be stronger than that of the same period of recent years.

　　Prices of memory chips for mobile and consumer electronics applications are likely to hike in a range of 10% as the possibility of a shortage is high in the third quarter, Nanya said.

　　Meanwhile, Nanya plans to launch a cost-down 30nm process soon. The new process will be able to reduce cost by 10-15% but with increased number of dies per wafer, Nanya said, noting that it will ramp up the new 30nm production starting the third quarter. Production of 30nm devices accounted for 70% of Nanya's total production in the first quarter of 2014, the company noted.

　　Nanya posted net profits of NT$6.12 billion (US$202.04 million) or NT$0.26 per share on revenues of NT$11.69 billion in the first quarter of 2014. First-quarter gross margin stood at 39.9% compared to 17.8% a quarter earlier.