DOW JONES 90-DAY NEWS/RETRIEVAL Int'l News & Research Services
Sequence Number : 479 Story Date : 98/08/07
5 03:12 T S. Korean Chip Makers To Temporarily Stop Production Again
SEOUL (AP)--For the third time this year, South Korea's major memory chip
makers plan to halt production temporarily this month in an attempt to boost
prices in a glutted market.
Production cutbacks in June and July by the three big South Korean companies
and some Japanese chip makers helped increase prices, but not enough to cover
production costs.
A 64-megabit Dynamic Random Access Memory (DRAM) chip sold for $8.80 in early
August, up from $7.60 in July. Producers say the price has to reach $10 to
cover costs.
'By reducing production, we can boost the world's chip prices. If necessary,
we will take a similar measure again later,' said Kim Byong-tak, a spokesman
for LG Semicon Co. (Q.LGS).
Samsung Electronics Co. (Q.SSE), the world's biggest computer memory chip
maker, said it will stop production lines Aug. 16-22.
Hyundai Electronics Industry Co. (Q.HEL) , the nation's No. 2 chip maker,
will stop production Aug. 13-20, while LG Semicon, South Korea's third largest
chip maker, will halt production Aug. 10-16.
The production cutbacks will decrease their August output by 20 to 25%, they
said. The three companies normally produce 53 million 16-megabit DRAM chips and
25 million 64-megabit DRAM chips a month, supplying 40% of the world's memory
chips.
Japanese and U.S. chip makers have charged that South Korea's rapid expansion
of facilities resulted in the drastic price cuts. South Korea put the blame on
such new market entries as Taiwan.
Memory chips store operating instructions for electronic products such as
personal computers.
In 1997, South Korea exported $17.5 billion worth of semiconductors, or 12.8%
of the country's total exports.
(END) DOW JONES NEWS 08-07-98
03:12 AM
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