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Taiwan's DRAM makers signal shift to 16Mb

Margins higher than 64Mb parts

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Taiwan Dramurai UMC has ramped up production of 16Mb DRAM chips to capitalise upon the parts' higher profit margins as 16Mb parts become almost as expensive as 64Mb chips.

According to Taiwanese business paper the Commercial Times, 16Mb chips are only fractionally cheaper than 64Mb parts. The current price for 64Mb DRAM is around $6 - 16Mb DRAM is now up to $5.37 and rising, the paper says.

When a manufacturer can churn out and sell four 16Mb parts for every one 64Mb chip, it's not hard to see why UMC and fellow Taiwan memory makers Nanya, Powerchip and Vanguard want to promote sales of 16Mb DRAM, despite the cost of switching 64Mb production to 16Mb.

16Mb DRAM is proving increasingly popular as demand grows for low-memory devices, such as phones and PDAs. Then there's the fact that, as Japanese memory companies increase production of 64Mb DRAM, they're outsourcing less production to Taiwan, leaving Taiwanese manufacturers with spare capacity.

The irony here is that 16Mb technology was largely assumed to be past its sell-by date, as producers followed demand and shifted to 64Mb production. ®

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