The recent unexpected fall in demand for 64Mb Dynamic Random Access Memory (DRAM) chips has prompted South Korea’s top two semiconductor makers to increase production of 128Mb units along with a handful of top Japanese manufacturers.
Samsung, the world’s largest DRAM maker, produced 1.4 million 128Mb units last month, but plans raise production to six million next month and 10 million by year end. Hyundai Electronics Industries is looking at a production volume of 1.5 million by the end of June and two million in the second half of this year. Japan’s Toshiba has collapsed its 64Mb unit output by 90%, while hiking the output of 128Mb chips to two million per month. The company plans to further boost production to seven million by year-end.
While the demand for computers with Pentium III microprocessors is slow for the time being it should improve in the third quarter, thus boosting the demand for the 128Mb units, a Samsung official told the Korea Times. He said 64Mb chips are now fetching $8 to $10 on the market but the price is dropping and their replacement with the 128Mb chips is a natural transition in the semiconductor market.
Industry analysts predict 128Mb chips sales to be worth $1.4bn this year, rising to $6.6bn next year, before falling back to $5.7bn in 2001 as 256Mb chips take over.
