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Hynix warns it may cut chip production

That'll bump up memory prices

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Korean chipmaker Hynix Semiconductor has warned that the current downturn in the IT industry may force it to reduce manufacturing.

"As the situation is bad we could consider (cutting production)", a Hynix spokeswoman told Bloomberg. "We understand other companies are also considering cuts," she added.

Korean semiconductor makers, which account for around 40 per cent of world chip production, last reduced production in 1998, when they closed their factories for two weeks. As a result, supply stopped outstripping demand and prices increased.

Bloomberg reports that every time chipmakers have cut production it has resulted in sharp price rises for memory chips.

Hynix rivals Samsung Electronics and Micron Technology said they did not plan to chop manufacturing.

Meanwhile, IDC expects chip sales to fall by more than 40 per cent in 2001.

Last month Hynix announced it would convert two of its SDRAM production lines in Inchon, South Korea, to make DDR chips. The company, which is also trying to separate itself from parent company Hyundai, said it aimed to grab half of the DDR SDRAM market by the end of the year. ®

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