Japanese government to force measures against dumping by South Korean DRAM makers
The Nikkei English News Service via NewsEdge Corporation : SEOUL (Nikkei)--NEC Corp. (6701), Hitachi Ltd. (6501), Toshiba Corp. (6502) and Mitsubishi Electric Corp. (6503) indicated Wednesday they are considering filing a complaint with the Japanese government to force measures against dumping by South Korean DRAM makers. The rather desperate move illustrates how the firms have been cornered amid the free fall of chip prices.
The news has baffled South Korean DRAM makers. Samsung Electronics Co., the world's largest DRAM maker, denied the allegation and offered to meet to resolve what it thinks is a misunderstanding by the Japanese firms. Global number three Hynix Semiconductor Inc., said the global IT recession was the real cause of the fall of semiconductor prices.
But the comments appear to have had no impact on the Japanese makers. "These firms feel seriously threatened because they may have no choice but to withdraw from the market if the current price level continues for another six months. And they blame South Korean makers for pushing the prices below cost," an executive of a major Japanese semiconductor maker said.
The truth is South Korean DRAM makers have also been hurt badly by the price slump, and are in no condition to dump products to gain market share. Samsung Electronics' semiconductor division posted its first-ever loss in the July-September quarter and Hynix Semiconductor is in grave crisis.
Following another sharp downturn in the semiconductor price, DRAM makers worldwide have been forced to sell below cost. Because the wild price fluctuations are a structural problem of the market which keeps repeating the cycle of drought and oversupply, many are strongly questioning the wisdom of the Japanese makers' accusation that their problems have been caused entirely by South Korean manufacturers.
Some analysts suggest, however, the Japanese firms are well aware they have little chance of convincing the government of the dumping allegation, preferring to believe the makers are hoping it may shock the market and trigger a price hike, or at least serve as a deterrent to further price cuts.
"Japanese DRAM makers are unhappy about Hynix as they think the company has been driving up their losses by offering unreasonably low prices to gain cash revenues," an unnamed industry source said.
After being put under the management of financial institutions, Hynix has been negotiating for an additional injection of funds and the sale of some of its plants to a Chinese company. Analysts believe the global DRAM oversupply is unlikely to end unless a major maker goes out of business.
This is why some suggest the Japanese firms are trying to send a message not to help Hynix resurrect its business.
(The Nihon Keizai Shimbun Monday morning edition)
291710 JST OCT 01
<<The Nikkei English News Service -- 10/29/01>> |
