After failing to drive up memory chip prices in June by halting production for seven days (CI No 3,447), Samsung Electronics Co Ltd says will do the same this month, next month and the month after, or as long as it takes to stimulate prices. Samsung will keep making some eight million 64Mbit parts a month – it’s capacity is 12m – but has cut 16Mbit production by 66% from a year ago to six million parts a month. While other Korean manufacturers also cut their production of memory parts in recent months, Hyundai Electronics Industries is reportedly studying the possibility of reducing its production again while LG Semicon is supposedly short of parts and will continue full production. The failure of last month’s attempt to drive up prices was in large part due to Japanese and US memory manufacturers’ refusal to follow suit – Micron Technology doubled its production last year – and there seems little hope that unilateral action by Samsung will be enough to have the desired effect this time around. If Hyundai follows Samsung’s lead and stops production for a week it’s thought that global production of DRAMS will be cut by 7%; the two together account for 28% of world memory supply. The Korea Times reported that on June 29 prices of 16Mbit synchronous chips ranged between $1.40-$2.83 in US markets while the 64Mbit synchronous units fetched between $7.70 and $10.84. DRAM prices have been falling since April 1996, the Korean blames oversupply created by a number of Taiwanese companies coming on board in technical collaboration with Japanese chipmakers.
