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NEC, Toshiba moot anti-Hynix, anti-dumping complaints

Bit rich in the circumstances

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The DRAM market is starting to get nasty. NEC and Toshiba are both deciding whether to make anti-dumping complaints against Korean memory makers - a stance that mirrors one taken by US-based Micron last month.

The target is clear: Hynix. Indeed, it's hard not to see all three companies' motivation as an attempt to push the ailing memory maker over the brink and into liquidation.

Few if any memory companies will admit the fact, but analysts and market watchers concur that almost all memory makers are now shipping product below cost, such has been the collapse in global DRAM prices during 2001. By definition, that means any of them selling overseas are technically breaching anti-dumping regulations, but since they're all doing so, it's a bit rich for company A to complain about company B on these grounds.

That may explain why both NEC and Toshiba have simply admitted to considering such a move. Likewise Micron said much the same a month or so ago, though to date it has still to make any official complaint to the US government.

Further evidence of the Hynix-centred nature of the complaints comes from NEC, which admitted to EBN that, like Micron, it is also considering complaining that the Korean banks' agreement to support aspects of Hynix's debt restructuring plan amount to unlawful interference on the part of the Korean government. Why? Because the state owns significant stakes in all the key Korean banks.

Hynix should be allowed to live or die on its own, Micron argues, not through aid that runs contrary to World Trade Organisation regulations.

If Hynix does collapse, it would certainly ease some of the downward pressure on memory prices, but we're not entirely convinced that it's enough to halt the decline. Some more memory makers will need to go under or combine their operations with others', Elpida-style, such as the possible merger between the memory businesses of Infineon and Toshiba. ®

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