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To: Skeeter Bug who wrote (39123)	9/26/1998 2:05:00 PM
From: DJBEINO	Respond to of 53903

Following Short-Term Memory Gains, Vendors Hope for Price Increases Doug Olenick New York - After three consecutive years of deep price drops, memory manufacturers are beginning to reap the results of recent consolidation efforts. Memory prices, which are 60 percent lower than last year's, have stabilized at about $3 per megabyte in the past month or so, and there are indications prices will rise, said Luke Beshar, a senior vice president for memory-marketer PNY. Beshar said he expects retail prices to reflect the increases, but could not predict when this would happen. Others in the industry see the slight manufacturing price increases as having little impact on retail. "Pricing will stabilize," said Avo Kanadjian, vice president of Samsung's memory marketing. "I don't see any change in retail prices unless a shortage occurs, which I don't anticipate." Among the reasons for this minor turnaround, Beshar said, are the closing of chip fabrication plants and production cutbacks. In the past three weeks, Matsushita Semiconductor, Hitachi Semiconductor, Mitsubishi and NEC decided to close their U.S.-based fabrication plants. Factors cited for the closings are the Asian financial crisis, the worldwide glut of DRAM chips that has existed for most of the year and lower retail prices, Kanadjian said. "The plants were closed because they are obsolete, and there is not much capital for investing in plant upgrades in our industry right now," said Kanadjian, adding that Samsung does not plan any plant closings. Because the supply of chip components dropped after the plant closures, manufacturing prices have bounced back slightly, said Nahid Casazza, Kingston's product manager. This may lead to increased retail prices next year, she said, but for the time being, Kingston is absorbing the increased cost of the components. As a whole, memory-makers' revenues are expected to drop to between $15 billion and $16 billion this year, down from $20 billion last year, according to Kanadjian. "This is the most significant correction ever in the DRAM market. All of this translates into an unpredictable market," Beshar said. Casazza noted that toward the end of next year memory makers will begin producing Rambus chips, which she described as the next major memory technology. The chips use the Rambus in-line memory module (RIMM), as opposed to the DIMM and SIMM now available. RIMM-based chips feature greatly increased bandwidth-as high as 500MHz-which will make the PC faster. According to Apacer Memory America, which will make RIMM chips under license, the RIMM modules will be 10 times faster than a 66MHz, 16MB device and three times quicker than a 100MHz, 64MB chip. The first Rambus-equipped PCs are slated to arrive at retail in late 1999. Integration is likely to be slow, Casazza said, with only 30 percent of PCs expected to use the new technology by the end of 2000. Another change in the industry is being driven by PC vendors. Because many are now including 64MB of memory in their PCs, the manufacturing focus will shift from 16MB and 32MB chips to 64MB and 128MB modules, said Casazza. The 16MB module may be phased out in coming months. Copyright ® 1998 CMP Media Inc. techweb.com