Powerchip to cut DRAM production
Chipmaker hopes others will follow suit to stabilize prices
By Jim Carbone -- Purchasing, 9/10/2008 1:41:00 PM
Look for DRAM supply to tighten in the fourth quarter. DRAM manufacturer Powerchip announced that it plans to cut DRAM capacity 10-15% in the fourth quarter and it’s hoping other memory IC makers will follow its lead.
Both the DRAM spot and contract prices have dropped sharply in early September, says researcher DRAMeXchange. The DDR2 1Gb spot price dropped to near the cash cost, $1.30-$1.50, according to DRAMeXchange estimates, while the spot price for DDR2 512Mb dropped to the cash cost level in the fourth quarter of 2007. That resulted in DRAM makers shifting to the 1Gb in order to further lower the cost.
Though Powerchip's capacity cuts won't ease the oversupply too much, Powerchip hopes its action will prompt others to follow suit. ’DRAM makers should cut capacity to help the DRAM industry recover ASAP," says Frank Huang, PSC chairman.
In 2008, DRAM makers have cut capital spending up to 40%, due to huge losses in 2007. Qimonda has reduced its DRAM bit growth to 20%. However, Samsung grew its DRAM bit supply 100% this year and Hynix has increased its DRAM bit growth to near 60%.
Also see: Chip prices could be going up in 2009 due to capex cutback
DRAM bit shipments to increase only 10-20%
06/02/2009DRAM shortages could occur in second half
04/29/2009NAND, DRAM Production Cut
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