Mitsubishi bucks memory trend
By Kurt Oeler
Staff Writer, CNET NEWS.COM
March 26, 1998, 4:55 p.m. PT
Mitsubishi Electric will cut back on memory chip
production in 1998, distancing itself from the
vanguard of the transition to higher-capacity
DRAMs.
The diverse electronics giant will decrease output at
its Kumamoto and Fukuoka factories, particularly
scaling back on next-generation, 64-megabit
DRAM (dynamic random access memory) chips, a
company executive told Japan's Nihon Keizai
Shimbun. 64-megabit chips are expected to begin
replacing 16-megabit chips toward the end of 1998
or early in 1999.
The computer industry relies on 16-megabit
DRAMs to make up the memory modules found in
today's desktop systems. 64-megabit chips can
pack four times as much data onto a single chip,
giving a standard-sized module four times the
capacity. Currently, 64-megabit memory chips are
used in pricier servers and workstations, but not
standard PCs.
The transition will provide desktop buyers with
vastly more memory capacity, but the shift won't
take place just for customer convenience.
Computer manufacturers buy memory on a
cost-per-megabit basis, and have traditionally
shifted to denser memory chips only when the more
advanced product becomes four times or less
expensive than the contemporary standard. Last
fall, 64-megabit DRAM was on track to hit the 4X
point in the third quarter, according to some
analysts, although 16-megabit DRAM was
dropping in price as well.
Most memory manufacturers are planning to
increase 64-megabit chip production, according to
reports from Japan and elsewhere. Mitsubishi is
apparently moving in the opposite direction, cutting
back to 1 million from 4 million units per month.
Like other memory makers, Mitsubishi has been
hard hit by the hyper-competitive market, marked
by a surplus and prices very near the cost of
production. In the fiscal year ending in March,
Mitsubishi will report a loss largely because of a 60
billion yen ($462 million) shortfall in its
semiconductor division.
The company will return to profitability if it can hold
its chips losses to 40 billion yen, Nihon Keizai
Shimbun reported. |
