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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (46948)	7/6/1999 11:54:00 AM
From: phbolton	Read Replies (3) \| Respond to of 53903

The shift toward the low-cost PC was bad news for the DRAM market. And it remains to be seen if high-volume sales will lessen the devastating effect falling prices have had on DRAM suppliers. So far, low price tags have not prompted PC OEMs to increase PC main-memory consumption. DRAM prices have been dropping steadily in the last several quarters and could fall even lower in the second half of the year before firming in the first quarter of 2000. "The gloom and doom that pervaded the industry last year was driven by DRAM," said Chuck Byers, a spokesman for Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). Since March 8, the average price of a 64-Mbit DRAM has fallen from a little more than $9 to about $5.41, according to Merrill Lynch. The price decline has resulted in a nasty jostling for supremacy among DRAM makers; those that can slash production costs will likely survive, analysts said. Leading the pack is U.S. manufacturer Micron Technology Inc, which expects the unit production cost of a 64-Mbit PC100 DRAM to fall to about $3.50 by the end of the year, according to Takashi Mimura, an analyst with Societe Generale Securities North Pacific Ltd., New York. Micron's "basic strategy in the DRAM market is to eliminate rival manufacturers, so it is very likely that the company will continue to compete on price until the weaker competitors have been weeded out," Mimura said. Samsung's officials admit that the stiff competition and price cutting in the DRAM market is a major concern, but said the company will not engage in a price war. Samsung forecasts that prices will drop 35% in 1999 from the previous year and another 20% in 2000. "We are concerned about [DRAM] prices falling as low as $3.50 because it is not a realistic level, particularly if you want to reinvest for growth," said Samsung's Kanadjian. "Micron may continue the price cutting and sell at a loss, but Samsung will not." much more at financialweb.com