Mitsubishi in DRAM news, seeking internalized wiggle-room for its productive capacity. Not good news in the overall scheme of things just more prolonging the agony.
A service of Semiconductor Business News, CMP Media Inc.
Story posted at 3 p.m. EST/noon PST, 8/20/98
Mitsubishi plans to sell more DRAMs in-house next year
NEW YORK -- U.S. chip analysts are treating lightly reports from
Japan that Mitsubishi Electric Corp.'s chip division would try to double
the amount of ICs sold in-house to sister divisions. Mitsubishi officials in
Japan reportedly said they hoped in fiscal 1999 that internal sales could
reach 50% of total semiconductor revenue.
Without a corporate mandate for greater in-house purchasing of
Mitsubishi chips, the semiconductor group faces the same competitive
battle that has resulted in sister OEM divisions traditionally buying
three-quarters of their ICs from external sources. The other Mitsubishi
divisions, already irked that plunging DRAM prices have pushed
corporate profits heavily in the red, are unlikely to give the chip
operation any more favored treatment in their purchasing.
"There are always misgivings when a company does something like that
because the people selling outside the company think they can get a
higher price and the people buying inside the company want to get a
lower price," said Jim Handy, director of the memory service at
Dataquest Inc., San Jose. "What Mitsubishi will have is a lot of
grumbling but people will fall in line for the greater good of the
company."
He pointed out that Mitsubishi's move could cause problems for its
DRAM suppliers that don't have vertically integrated operations to sell
their own DRAMs to. "A company that doesn't consume DRAM but
only produces it would count on a Mitsubishi for business," he said.
Other companies could be affected if the other vertically integrated
DRAM makers followed suit, but so far this does not appear to be the
start of a trend, he said.
Mitsubishi Electric reported a $772 million net loss for the year ended
March 31, 1998. |
