There is money in Computer Chips

8. September 2009 by Dan Walkow, CFA, CMT.

In another sign of economic recovery, benchmark 1-gigabit computer-memory chip climbed to a 1-year high of $1.71, an indication of increased demand, according to Dramexchange Technology, operator of Asia’s biggest spot market for the chips.

Just to give you an idea of the profitability of the chip business consider that 1 gig of memory for your computer costs $ 1.71 to make and retails here in Vancouver for about $60. Thats the no name brand! Seems like good margins to me.

I am of the view that we are in for a technology cycle upgrade over the next two years where a new operating system from Microsoft, suppressed corporate spending and capacity busting usage of the Internet will propel a strong market recovery in the technology sector. The technology sector has been the best performing sector since the lows in March and I suspect it will continue for some time to come.

Posted in Investments | No Comments »