Debates on Reducing Production of 64M DRAM Chips Gains Steam
04/21 16:32
The debate on the reduction of the production volume of 64M (Megabyte) DRAM (dynamic random access memory) chips is flaring as their prices continue to plummet in the international marketplace.
According to industry officials, the massive production of the chips by three leading Korean makers and five Japanese companies is flooding the market, thus contributing to unexpectedly low prices.
Owing to a disagreement among the parties concerned, Japanese semiconductor makers are planning to work through the ''golden week'' which includes May 1 (May Day) and May 5 (Children's Day).
Korean companies, which had planned to stop their production lines in tune with their Japanese counterparts in early May, have also decided to continue producing through the holidays.
The main problem in the memory business is that while large companies like Samsung Electronics and NEC are in clear recognition of the fact that production cuts are needed to stabilize prices, others are not.
Companies like LG Semicon and smaller Japanese firms are convinced that the stabilization of prices is only a temporary change in market trends and that production cuts will have no long-term effects
''There are many problems facing smaller semiconductor makers. For instance, while the large firms have completed their manufacturing facilities for 64M units, companies like LG Semicon are still in the process, meaning that any reduction will cause a delay in the completion of their facilities,'' one expert said.
The over-production of memory semiconductors has been the cause of the devastating fall in prices since April 1996 and companies are out to make sure that a similar situation does not arise in the case of the 64M units.
One Samsung official said with the bit-cross currently about to take place, there is a strong need to protect the market from another collapse in prices like the one that occured in the case of the 16M chips.
The 16M chips sold for as much as $50 in early 1996 but began to spiral downward drastically in April of that year and are now trading at around $3 in international markets. |
