‘Dram production will shrink 10 to 12 percent’

In order to survive, almost all memory manufacturers have announced significant cuts in the production of dram chips. As a result, total dram production should decrease by 10 to 12 percent in the short term.

Nanya and Inotera, two major memory manufacturers, last week joined previous announcements from PSC, Samsung, Elpida, Hynix and Promos to scale back dram chip production. Inotera will cut its production by 20 percent, while Nanya has announced that it has indefinitely postponed some expansion plans. An already operating production facility, which is switching to Micron’s more efficient ‘stacked’ dram production process, will make 50% fewer dram chips.

The manufacturers’ announced plans will reduce global dram production by 10 to 12 percent, analysts estimate. Drama exchange in. Due to the sharply reduced demand, memory manufacturers have had to fight hard in recent months to keep their heads above water: the price for a 667MHz DDR2 chip of 512MBit was only 53 dollar cents on October 27, a drop of almost 12 percent in the last few months. not a week. A year ago such a memory chip cost $ 1.75. The price for a 1Gbit ddr2 chip reached an all-time low with a level of just under a dollar.

Analysts say that dram production will have to be cut by as much as 30 percent in the short term to bring the market back into balance. In the longer term, production should be structurally 20 percent lower than a month ago. Furthermore, the dram manufacturers must invest in new production processes, but due to the difficult times, many companies are short of money to fund these investments.