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DRAM makers pin profit hopes on 128Mb production

Taiwanese competition means even lower 64Mb prices

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Far Eastern DRAM makers are accelerating production of 128Mb DRAMs, following recent sharp falls in 64Mb prices. According to the excellent Taiwanese IT pub, Eurotrade, Samsung aims to shift ten million units per month, up from its current production volumes of 1.4 million. Korean rival Hyundai wants to ramp up from 100,000 units a month to between 500,000 and 600,000 from May and 1-1.5 million by the end of July. Recently, Toshiba announced its intention to reduce manufacture of 64MB modules by 90 per cent by December to one million units per month, as it steps up production of 128Mb DRAM. New Pentium IIIs and shipments of Office 2000 is expected to demand for 128Mb DRAMs in the second half of the year. Unit prices of 64Mb DRAMs are currently fluctuating between $8 and $10, according to Eurotrade. It says prices will fall further, when mass production comes onstream from Taiwanese newcomers to the market. So far, prices of 128Mb DRAM are holding steady at $34 --$38. But it is questionable how long this price point can be sustained in the face of such a massive production ramp-up. Continuing DRAM price erosion claimed another manufacturing victim last week, with Matsushita announcing its intention to withdraw from the market. ®

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