Micron, flooding the market...
Let's see...if Micron is selling below cost (as they admit too) AND they are "flooding" the market...I wonder who is "buying" marketshare???
Taiwan DRAM makers say
Micron is flooding the market
By Jack Robertson
WASHINGTON -- Faced with a dumping
petition that threatens their competitiveness in U.S.
markets, Taiwan's DRAM makers struck back
earlier this week by charging plaintiff Micron
Technology Inc. with largely contributing to the
industry's oversupply.
In a fact-finding hearing before the International
Trade Commission here, representatives of a
Taiwan chip industry consortium maintained that
because Taiwan's limited market presence has
done nothing to inflame global overcapacity, a duty
assessment would do little to ease the industry's
glutted DRAM reserves
Rather, they said, Boise, Idaho-based Micron has
been a major contributor to over-production
through a relentless, and ongoing, series of DRAM
die shrinks that are yielding an ever-increasing
number of chips from the company's fabs.
John Reilly, an economic consultant representing
the Taiwan-based DRAM makers, testified that
Micron's die shrinks have added far more DRAM
chips to the already-saturated market than have
any of Taiwan's fabs.
"When Micron completes its process-technology
transfer to the Texas Instruments fabs they
acquired, this will have a significant impact on
global DRAM capacity," Reilly told the ITC.
Bonnie Byers, an economic specialist retained by
Micron, countered with evidence that at least 13
Taiwanese suppliers-a number equal to all the
DRAM makers remaining worldwide-have built
large fabs during the past two years as part of a
global master plan.
However, Taiwan Semiconductor Industry
Association president Glenda Wu said the island's
companies are even now in the process of scaling
back production. Major memory companies,
including Acer, Mosel-Vitelic, Nan Ya,
PowerChip Semiconductor, and Vanguard, are
cutting DRAM expansion and shifting production
to other goods.
In any event, Wu said, Taiwan has such a small
share of total DRAM sales that it "cannot make
any impact on the global market. Assigning
dumping duties on Taiwan manufacturers isn't
going to solve the big oversupply of DRAMs."
Ken Hurley, vice president and general manager of
Nan Ya Technology Corp. USA, told the ITC that
his company doesn't even compete in the same
DRAM sector as Micron. Nan Ya's
highest-density DRAM chips are 16-Mbit, devices
that Micron is phasing out of production.
"We make legacy DRAMs for legacy
applications," Hurley said. "We compete with
Korean and Japanese DRAM producers for these
products, not Micron."
Moreover, Hurley said, not a single Taiwanese
DRAM maker selling on the merchant market had
been qualified to sell to OEM customers on a
contract basis. Rather, he said, his company and
other Taiwan-based merchant suppliers sell their
products only to the spot market, where he
claimed Micron is reducing its presence.
Advocates for the island's chip companies also
questioned how Micron, which they said holds
50% of the U.S. market, could possibly be injured
by imports from Taiwan.
"Micron is now positioned as the world's largest
DRAM producer," Reilly said. "Intel Corp.'s $500
million investment in Micron reflects a big
confidence that Micron doesn't face any large
injury."
Reilly added that recent, sustained DRAM price
increases-ranging from 14% for 64-Mbit chips to
as much as 60% for some 16-Mbit devices-do not
bear out Micron's assertion that U.S. suppliers are
being hurt by foreign competitors. "Micron,
however, doesn't include this favorable pricing data
in their complaint, which stops listing prices in July
of this year," he said.
In its allegations, Micron had cited a decision by
Mitsubishi Electric Corp. to close a DRAM fab in
Durham, N.C., as evidence that underpriced
Taiwanese DRAM was forcing companies out of
business.
But Kevin O'Brien, an attorney for Mitsubishi, told
the ITC the Durham fab was an aging 4-Mbit
facility that was no longer cost-effective, and was
part of a much larger reorganization of Mitsubishi's
operations throughout the United States. |
