The decline in the worldwide price of DRAM chips, which has damaged a large number of chip producers, is set to continue this year, but the decrease in price will not be as dramatic as 1997. According to figures published by market research firm Dataquest Corp, DRAM prices will fall 40% this year, substantially less than the 75% drops witnessed in 1997. But this rate is still far worse than the average annual 20% drops seen over the past 20 years. The semiconductor market as a whole will also be hit this year, with demand forecast to grow 8.1% in 1998, over 1997 figures, which is only half the rate the industry has grown at in the past 20 years. Chip makers are already starting to feel the pinch, most noticeably Intel Corp, which has recently announced plans to cut 3,000 jobs over the next six months, on the back of a 7% decrease in revenue and a 36% fall in profits (CI No 3,389).
