DRAM Output in 1999 to Rise 54.5 Pct.; Micron to Lead in 64Mb Chips
November 23, 1998 (TOKYO) -- Nikkei Market Access, a membership IT information service, said that production of DRAM microchips in 1999 will likely recover for the first time in four years and surpass US$17 billion, up 54.5 percent from the estimate for this year.
This is the result of its market research on the DRAM market.
The DRAM microchip market witnessed peak production in 1995 under constant oversupply conditions, and it then started declining. However, in 1999 DRAM prices are expected to stabilize due to short supply. As a result, the output value will increase substantially.
This is not due to a projected sharp increase in demand for DRAMs, but because of a slowing of supply growth rates. As investments have been restrained owing to the industry recession, few new lines will start producing DRAMs in 1999.
Using state-of-the-art processes on the existing lines may help boost DRAM output, but manufacturers are less inclined to invest in such technologies. Improved production yield through implementation of leading-edge processes remains exceedingly difficult, and that's a primary factor that will continue to restrain the increase of DRAM supply.
Even under such an environment, Micron Technology Inc. of the United States is actively investing in production, in part by accepting funds from Intel Corp. Also, it plans to shrink its DRAM chip size, on its own lines and those purchased from Texas Instruments Inc. of Dallas, Texas.
As a result, Micron Technology will have a production capacity of about 40 million DRAMs a month in the fourth quarter of 1999 if computed on the basis of 64Mb DRAM microchips. It will be about equal with Samsung Electronics Co., Ltd. of Korea. Samsung will continue to rank first in the third quarter of 1999, but Micron Technology will likely gain the top position in the fourth quarter.
Korea's LG Semicon Co., Ltd. and Hyundai Electronics Industry Co., Ltd. are expected to merge. The new company's DRAM production capacity will likely exceed that of Micron Technology. But its availability factor is not easy to project for 1999. The resulting company will likely be able to demonstrate an optimum capacity from about 2000.
Thus Micron Technology will likely rank first in DRAM production at the end of 1999.
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