Semiconductor Market Shows Signs Of Bottoming Out
Thursday, January 7, 1999
TOKYO (Nikkei)--Evidence is emerging that memory-chip prices have begun
bottoming out following a sharp downturn, thanks to production cuts by Japanese and
South Korean makers as well as strong demand for personal computers.
The U.S. price of a 64-megabit DRAM chip, which fell by as much as 60% in the six
months before its slide halted in June 1998, currently stands in the upper end of the 9
dollar range. The benchmark price rose above 10 dollars in November as PC makers
accelerated their parts procurement ahead of the holiday shopping season.
The price recovery was triggered by production cuts carried out last June by Samsung
Electronics Co. and other South Korean makers. In addition, as Japanese makers
freeze production increases, the memory glut has been easing.
Thanks to the upturn in the U.S., Japanese chip makers have been increasingly
successful in hiking the prices charged to makers of PCs and PC peripherals. Large-lot
users are now paying 1,000-1,200 yen per chip, up from 1,000-1,100 yen last June.
South Korean makers began relaxing production cuts since November. But an official at
LG Electronics Japan Inc. says the firm, like many others, is "focusing on profitability
rather than higher market share." Given the trend, the supply of 64M DRAMs is unlikely
to rise sharply for some time, analysts say |
