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NEC cuts back on Rambus production

Overestimated demand, analysts warn

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As the price of 64Mb memory rises, major semiconductor firm NEC has started to put chips on allocation, according to analysts Bear Stern. And, at the same time, NEC insiders is believed to have now realised it vastly overrestimated the impact of Rambus memory and is taking steps to cut back supply and shift production lines to SDRAM (synchronous memory). Although conventional NEC memory is not yet on allocation, the Japanese firm has raised the contract price of parts to its large PC customers by 25 cents, meaning that 64Mb parts are now likely to cost $6.50. PC customers are anxious to stake their claim for supplies from the Japanese electronics giant, and already placing orders for as much as up to six months in advance. However, the $6.50 price is unlikely to hold during this period, and, indeed are likely to rise. Hard allocation of parts is likely during the second half of this year, Bear Sterns is warning its clients. The demand for synchronous memory is such that NEC is to scale back wafer starts for Rambus memory and use the production lines for SDRAM instead, the same sources added.

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