***OT***But classic...
A service of Semiconductor Business News, CMP Media Inc.
Story posted 5 p.m. EDT/2 p.m. PDT, 11/13/98
Taiwan DRAM makers say
Micron is flooding the market
By Jack Robertson
WASHINGTON -- Faced with a dumping petition that threatens their competitiveness in U.S. markets, Taiwan's DRAM makers struck back earlier this week by charging plaintiff Micron Technology Inc. with largely contributing to the industry's oversupply.
In a fact-finding hearing before the International Trade Commission here, representatives of a Taiwan chip industry consortium maintained that because Taiwan's limited market presence has done nothing to inflame global overcapacity, a duty assessment would do little to ease the industry's glutted DRAM reserves
Rather, they said, Boise, Idaho-based Micron has been a major contributor to over-production through a relentless, and ongoing, series of DRAM die shrinks that are yielding an ever-increasing number of chips from the company's fabs.
John Reilly, an economic consultant representing the Taiwan-based DRAM makers, testified that Micron's die shrinks have added far more DRAM chips to the already-saturated market than have any of Taiwan's fabs.
"When Micron completes its process-technology transfer to the Texas Instruments fabs they acquired, this will have a significant impact on global DRAM capacity," Reilly told the ITC.
Bonnie Byers, an economic specialist retained by Micron, countered with evidence that at least 13 Taiwanese suppliers-a number equal to all the DRAM makers remaining worldwide-have built large fabs during the past two years as part of a global master plan.
However, Taiwan Semiconductor Industry Association president Glenda Wu said the island's companies are even now in the process of scaling back production. Major memory companies, including Acer, Mosel-Vitelic, Nan Ya, PowerChip Semiconductor, and Vanguard, are cutting DRAM expansion and shifting production to other goods.
In any event, Wu said, Taiwan has such a small share of total DRAM sales that it "cannot make any impact on the global market. Assigning dumping duties on Taiwan manufacturers isn't going to solve the big oversupply of DRAMs."
Ken Hurley, vice president and general manager of Nan Ya Technology Corp. USA, told the ITC that his company doesn't even compete in the same DRAM sector as Micron. Nan Ya's highest-density DRAM chips are 16-Mbit, devices that Micron is phasing out of production.
"We make legacy DRAMs for legacy applications," Hurley said. "We compete with Korean and Japanese DRAM producers for these products, not Micron."
Moreover, Hurley said, not a single Taiwanese DRAM maker selling on the merchant market had been qualified to sell to OEM customers on a contract basis. Rather, he said, his company and other Taiwan-based merchant suppliers sell their products only to the spot market, where he claimed Micron is reducing its presence.
Advocates for the island's chip companies also questioned how Micron, which they said holds 50% of the U.S. market, could possibly be injured by imports from Taiwan.
"Micron is now positioned as the world's largest DRAM producer," Reilly said. "Intel Corp.'s $500 million investment in Micron reflects a big confidence that Micron doesn't face any large injury."
Reilly added that recent, sustained DRAM price increases-ranging from 14% for 64-Mbit chips to as much as 60% for some 16-Mbit devices-do not bear out Micron's assertion that U.S. suppliers are being hurt by foreign competitors. "Micron, however, doesn't include this favorable pricing data in their complaint, which stops listing prices in July of this year," he said.
In its allegations, Micron had cited a decision by Mitsubishi Electric Corp. to close a DRAM fab in Durham, N.C., as evidence that underpriced Taiwanese DRAM was forcing companies out of business.
But Kevin O'Brien, an attorney for Mitsubishi, told the ITC the Durham fab was an aging 4-Mbit facility that was no longer cost-effective, and was part of a much larger reorganization of Mitsubishi's operations throughout the United States.
--Duker
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