DRAM production cuts unlikely – analyst

Memory makers fear the consequences

The world's major DRAM makers are unlikely to follow fellow memory producer Hynix and cut chip production.

So says at least one analyst watching the sector, according to a Korea Herald report. Merritz Securities' Choi Suck-po (we kid you not) reckons that rumours of production cuts are false.

Citing the last time any of the majors cut DRAM production, back in 1997, Choi noted that Samsung, which initiated a joint cut with Hynix, LG and others, found itself doing rather less well than the likes of Micron, which continued to punch out as many RAM chips as before.

"The production cuts at the time produced various negative effects, making chipmakers cautious about taking the option ever since," he said.

The prospect of production cuts was raised this week when Hynix warned that it might have to reduce its output if the market slump continues much longer.

"As the situation is bad we could consider [cutting production]", said a Hynix spokeswoman. "We understand other companies are also considering cuts." ®

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Korea Herald: DRAM makers unlikely to cut back on production