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To: DJBEINO who wrote (27103)	1/25/1998 12:16:00 PM
From: Richard Russell	Read Replies (2) \| Respond to of 53903

To: DJBEINO (27102 ) From: DJBEINO Saturday, Jan 24 1998 9:26PM EST Reply # of 27128 Monthly DRAM Watch (January) Prices of DRAM chips started bottoming out in January, a sudden turnaround from two years of steady decline. Korean manufacturers have reduced output because of the currency crisis in that country, while Japanese makers are scaling down production plans. The result has been the first rise in eight months for spot prices on 16-megabit memory chips. Benchmark extended data-out DRAM chips were changing hands at 400-440 yen on Jan. 16, up about 40% from the end of 1997. Paralleling the turnaround for 16M DRAMs, the price of 64-megabit chips gained 13% to around 1,800 yen. Economic turmoil is seen complicating procurement of silicon wafers and leadframes for Korean makers. They will not be able to import as much semiconductor fabrication equipment as planned, making it very likely they will have to scale down output plans for fiscal 1998, say industry analysts. Because South Korea's chip industry provides more than 30% of the world supply of 16M memory chips, upward momentum for prices will likely swell if the South Koreans cut production further, the analysts note. Japanese makers have also been forced to trim production schedules as the long decline in chip prices has eroded profitability. Nippon Steel Semiconductor Corp. and Oki Electric Industry Co. have abandoned plans to mass produce 64M DRAMs; NEC Corp. and Fujitsu Ltd. may reduce output of 16M memory chips. Some analysts now expect the supply glut on the world market will stop expanding, and perhaps even shrink in 1998. Price quotes for personal computer makers and other large-lot users are likely to bounce back soon given the movement of spot prices, the market's leading indicator, the analysts forecast. -------------------------------------------------------------------------------- Monthly DRAM output of major 6 chip makers (in millions) 16M 64M Dec. 1996 Dec. '97 March. '98* Dec. '96 Dec. '97 March. '98* NEC Corp. 12 13 11 0.5 3 5 Hitachi Ltd. 11 Almost 10 9 0.05 2 3 Toshiba Corp. 7 7 7 0.1 1 3 Fujitsu Ltd. 6 7 7 0.06 1 3 Mitsubishi Electric Corp. 8.5 6 6 0.05 3 3.5 Oki Electric Industry Co. 3 3 3 --- 0.3 0.4 *Forecasts Easier reading.