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

To: William Griffin who wrote (30031)	5/10/1999 9:07:00 AM
From: Jeffrey D	Respond to of 70976

Bloomberg? How about this? Jeff SEOUL, May 10, 1999 (Asia Pulse via COMTEX) -- South Korea's semiconductor makers are earning enormous profits from producing and selling 128 Mega DRAM chips, industry sources said Monday. Chipmakers are taking advantage of the recent surge in demand for the chip, a transitory product before the switch to the 256 Mega DRAMs from the 64 Mega DRAMs, thanks to their early presence in the market. The current price for 64 Mega DRAMs have skidded to their lowest level of US$7 to $9 apiece with hardly any profit margin, in contrast to those of 128 Mega DRAMs quoted consistently at around $35 to $40 each. In particular, the production cost for the chip is double that of the 64 Mega DRAMs, but sells for as high as four times the price of the old chip and resulting in huge profits for the makers. For example, per unit production cost is $7 for the 64 Mega DRAMs and sells for $8 per piece at a $1 profit. The unit production cost for the 128 Mega DRAM comes to $14 and sells for $35 per chip at a $20 mark-up. Samsung Electronics (KSE: 09150) has been mass producing the chip since July last year, and presently turns out 2 million chips per month in taking some 60 percent of the world market. The company has been earning $40 million in profits per month from the sale of the chips. Hyundai Electronics (00660) and LG Semicon (29890) have been producing 300,000 of these chips each month, but plan to expand production to 500, 000 each next month. Domestic chipmakers will continue to see huge profits as world demand for the chip is expected to surpass supply for the forseeable future, industry sources said. They will, however, see more competition from Japanese chipmakers like NEC and Toshiba, who are planning to produce some 300,000 to 500,000 128 Mega DRAMs per month in the second quarter. >>