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

To: Skeeter Bug who wrote (47559)	8/8/1999 5:20:00 PM
From: Steven Ivanyi	Read Replies (1) \| Respond to of 53903

Japanese try offshore DRAM production By Yoshiko Hara TOKYO — Japanese memory vendors moved this week to stanch the bleeding in the DRAM business by shuttering plants or moving production to low-cost locations. Hitachi Ltd. said that it will build sample volumes of its 256-Mbit DRAM this month at its leading-edge fab in Hitachi-Naka, in the Ibaraki prefecture, but that it will move volume production to Hitachi Nippon Steel Semiconductor Singapore, a joint venture with Nippon Steel and the Singapore government. "The Singapore fab concentrates on DRAMs and fabs in Japan will produce high-value-added devices," said a Hitachi spokesman. Hitachi will run ASICs, logic (mainly SH microprocessors) and flash memory at its leading-edge Naka fab in Japan, the spokesman added. At Fujitsu Ltd., officials scrambled last week to deny reports that the 256-Mbit generation would be made offshore. Executives confirmed, however, that they would lean more heavily on factories at Gresham, Ore., and Durham, U.K. "We have completed the development of a 256 [Mbit] DRAM and are watching the market. Where to produce it has not been nailed down yet," a Fujitsu spokesman said. NEC Corp., which recently announced plans to slash semiconductor investment this year by $210 million, will cut production of 16-Mbit DRAMs and concentrate on the next-generation DRAM. "Our 64-Mbit DRAM production will be ramped up to 10 million units a month by year's end [as planned], but then we'll halt the expansion and watch the market situation," a spokesman said. NEC had originally planned to increase 64-Mbit unit production to 15 million units per month next year. "Resources gained from the [cutbacks] will be used for logic production," the spokesman said. "There is no profitable company in the DRAM business," said Akira Minamikawa, senior analyst at IDC Japan. "The cost of [producing] a 64-Mbit DRAM is about $10, but the market price has dropped to $8. When the price drops below cost, manufacturers usually stop production, but they are still producing. It is extraordinary."

To: Skeeter Bug who wrote (47559)	8/8/1999 5:25:00 PM
From: Bharat H. Barai	Read Replies (1) \| Respond to of 53903

Many manufacturers with old fabs running at .35 or .25 have to spend to convert to .20 or .18. Cost of manufacturing at .25 in very high and uneconomical. Fujitsu is not shutting down the fab but using the capacity to make flash memory products which have much higher margins than DRAM. They have to use their resources to get maximum returns. They have technology to make flash memory products and want to use the capacity that way. Nobody can continue to make DRAM at loss for ever. Ultimately, the law of supply and demand catches up. Nobody can predict the DRAM prices for future and Micron stock price either. We make best educated judgement calls and put our money accordingly, if we choose to do so. For last 20 years, there have been boom and bust cycles in DRAM. We had very deep bust period from end of 1995 to now. Hopefully, better days are ahead and we will avoid such drastic ups and downs in DRAM supplies and prices.