Monday January 19, 5:34 am Eastern Time
Japan's chip makers sceptical of 16M DRAM upturn
By Yuko Inoue
TOKYO, Jan 19 (Reuters) - Major Japanese semiconductor makers on Monday took a sceptical view of a recent
upturn in prices of mainstay computer memory chips, saying any bottoming out of the memory chip market appeared
to be a long way off.
''Prices have picked up lately, but market prospects are as cloudy as ever,'' said a spokesman for NEC Corp
(Nasdaq:NIPNY - news; 6701.T). ''South Korean makers could start a massive sell-off of their inventories at any
time.''
Mami Indo, an analyst at Daiwa Research Institute, said: ''No one believes the market trend has changed.''
Hitachi Ltd (NYSE:HIT - news; 6501.T) said on Monday it would cut output of dynamic random-access memory
(DRAM) and other memory chips by about 20 percent in February and March from the current level.
Fujitsu Ltd (OTC BB:FJTSY - news; 6702.T) said it was considering cutting capital investment in chip production
by 30 to 40 percent in fiscal 1998/99, starting on April 1, from the 1997/98 level, while Mitsubishi Electric Corp
(6503.T) last week announced a 15 billion yen ($116 million) cut in capital investment for chips this business year.
Industry analysts say the spot market price of a standard 16-megabit DRAM chip -- the current mainstay chip for
use in personal computers (PCs) -- jumped to around $2.70 in mid-January, up 30 to 40 percent from a month ago.
Rumours that South Korea's economic woes might make it difficult for chip producers there to buy parts and
materials prompted some PC makers to boost spot purchases, analysts said.
South Korean makers currently produce more than 30 percent of the 16-megabit DRAMs on the global market.
''South Korean (producers) in general still have an abundant inventory of wafers, but a lack of import materials, such
as lead frames and packages, poses a serious problem for some makers,'' said Societe General analyst Takashi
Mimura.
If the value of the South Korean won stabilised, however, producers could gear up for exports, causing violent
fluctuations in the spot market, he added.
Analysts say a recovery of the memory chip market will not come until late this year, when South Korean makers
could be forced to cut production and capital investment.
Supplies of Japanese-made chip production equipment to South Korean producers have now completely stopped as
Japanese makers refuse to accept letters of credit supplied by South Korean banks.
''This will work as a sharp restraint on their chip production in the latter half of this year,'' said Akira Minamikawa,
analyst at IDC Japan, a research company.
Japanese makers are hoping that fast PCs scheduled to hit the market in the middle of this year may lift demand for
high speed and expensive DRAM products later in the year.
After a crash in standard 16-megabit DRAM prices last year, Japanese makers are now rapidly shifting to
higher-end products, such as synchronous DRAMs with access speeds of more than 125 MHz.
The new PCs use a large number of high-speed 64-megabit synchronous DRAMs to provide better picture quality
than current models.
($1 equals 129 yen) |
