Hitachi Metals to Hike Nickel Based Lead Frame Price

Hitachi Metals will raise the selling price of nickel based lead frame by around 563 yen per kilogram for shipment in October, which is the packaging material for silicon integrated circuit chip. The firm will raise the price by 463 yen per kg to reflect the surge of nickel price and by about 100 yen per kg as the margin to cover the productive costs expansion including processing charge, fuel and raw material costs. The firm is currently suffered from the sharp increase of the productive costs when the heavy oil price stays high used as the fuel in the lead frame production. The firm and the chip makers are now in the price negotiation for the hike.The price of nickel based lead frame fluctuates along the previous 3-month averaged nickel price as well as including the margin for processing charge, production and raw material costs. Hitachi Metals decided to raise the margin for the first time since January 2004. The lead frame price would be hiked largely for October shipment thanks to the much increase of nickel price and the margin hike. The firm seems to face much difficulty in the price negotiation with the users consequently.Hitachi Metals is the top maker of nickel based lead frame in Japan. Its order received increased by 5% in April-June 2006 from the same period of 2005 when the demand is strong for packaging of memory chip such as dynamic random access memory (DRAM) for cellular phone, personal computer and digital appliances. The order received is expected to increase by near 10% in the half year to March 2007 from the same period of the previous year. However, the yield ratio has recently downed due to the more demand for thinner lead frame. The firm is suffered from the cost increase due to the lower yield ratio and aims to cover the costs by the margin hike.