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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (47101)	5/22/2001 1:44:33 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

DRAM Prices Keep Falling Amid Cautious Optimism By Nho Joon-hun Staff Reporter There is an increasing sense of cautious optimism for a turnaround in the dynamic random access memory (DRAM) market even as prices continue to fall to new lows. According to industry sources, the prices of 128 megabit synchronous DRAM chips fell to a low of $3.25 at the Taiwanese spot market at the end of last week, down 82 percent from the $18.20 of July 16 and 48 percent less than the previous 12-month average of $9.52. While such a pricing trend does have a serious impact on the memory semiconductor industry as a whole, there are numerous reasons why some are cautiously optimistic about a recovery. ``For one thing, prices tend to rebound sharply six to 12 months after a bit cross, as was the case in August 1998 when 64M units became the market standard,'' one industry analyst said. Then, the prices of the 16M and 64M chips were $3.3 and $12.8 in spot markets. The prices of the 64M units subsequently fell to $4 in June the following year but recovered to $10 in August and soared to over $20 in September although the latter rebound was fueled by an earthquake in Taiwan which caused damage to local chipmakers. The bit cross from the 64M to the 128M began taking place from the end of last year which initially caused prices to drop drastically amid a general slowdown in the demand for personal computers. ``There are numerous indications, particularly when the current situation is compared to the bit cross from the 16M to the 64M, that the bottom is either here or near,'' the analyst said. At the same time, PC makers are believed to be nearing the completion of their inventory control which began last November. And an active market for the Pentium 4 should generate new demands for more powerful computers both at home and at the office. Making conditions even more optimistic is the fact that the information technology markets in emerging regions like China, India and Central Europe will further fuel demands. ``In particular, the Chinese semiconductor market is anticipated to grow by 6.3 percent this year as the socialist country prepares to join the World Trade Organization this fall,'' the analyst said. Yet another positive expectation in the PC market is that the proportion of the production costs accounted for by DRAMs have fallen from 8 percent in the final quarter of last year to 2 percent in the first quarter of this year and it is unlikely that it will fall any lower. ``The reality of the DRAM market is that the number of leading producers have dropped from 28 in 1997 and 1998 to just seven-partly because of mergers like that between Hynix Semiconductor and LG Semicon-and there is little indication that there will be aggressive investments in facilities in the foreseeable future,'' the analyst noted. If anything, he said, there are unconfirmed reports that large DRAM producers are looking to reduce production while avoiding allegations of collusion even as the sales of PCs look to improve as students in advanced countries prepare to get back to school in August. ``There are naturally concerns about the low prices but there are also clear indications that the market is due for an upturn,'' the industry analyst said. jakenho@koreatimes.co.kr hk.co.kr