Hynix mulls cutting DRAM output by 20 percent
By Paul Kallender
EE Times
(06/29/01, 8:44 p.m. EST)
TOKYO — South Korean DRAM vendor Hynix Semiconductor Inc. appears ready to take an unprecedented move to reverse its own fortunes and, by extension, those of the DRAM market. The former Hyundai Electronics Industries said this week it may cut DRAM production about 20 percent this month in a bid to halt the chip industry's bloodiest price war.
But if Hynix makes good on its promise, it may find itself the odd man out among its largest competitors, analysts and other vendors said this week.
Hynix is considering switching DRAM production at geometries above 0.18 micron to nonmemory or foundry production, said Farhad Tabrizi, worldwide marketing vice president for memory products at Hynix. The move could come soon after the July 4 holiday, he said.
About 20 percent of Hynix's DRAM production is on older-technology, 0.21- and 0.19-micron processes, Tabrizi said.
"Beyond a certain threshold of pain, it doesn't make sense to keep on producing," he said.
Wrapped into Hynix's move is its assertion that a cut could turn around the market if competitors follow suit. Taking out 20 percent of Hynix's production could reduce world production by 4 percent. That could trigger a change in spot pricing and spark a price recovery, Tabrizi claimed.
"We think there is between a 5 and 8 percent oversupply at the moment. If we cut a week or two weeks out of production, it could change the psychology. It doesn't take that much," he said.
Tabrizi said discussions within senior management over the plan come at a time when the market has reached rock bottom and when other companies are discussing similar options.
eet.com |
