A bright future is being predicted for Taiwan's DRAM makers as the industry emerges from a three year slump. "Next year will be very good for the DRAM business, simply because demand will be much higher than supply," said Hander Chang, assistant vice president and spokesman for Winbond Electronics. Winbond, Taiwan's largest DRAM maker, holds roughly 5 per cent of the global market. DRAM memory chips are used in all personal computers, and in many other electronic devices. Taiwan currently holds around 12 per cent of the worldwide market, which was worth over US$16 billion this year. In 2000, with global market value expected to exceed US$20 billion, Taiwan's share will rise above 20 per cent, analysts say. "I expect the DRAM industry to see significant growth for the next three years," commented industry analyst Eric Wang of ABN Amro, Taipei. "All the producers will benefit from an upturn in the cycle. In the short term, however, in the next three months I see a lot of pressure on the price." "DRAM is supply driven industry and a lot of new supply will come into the market in the next three months," he explained, "However, the price will come down but not collapse." Wang believes that manufacturers will hold extra inventory during the next few months, and will use it to even out dramatic price swings on the spot market. Some analysts predict that ongoing stockpiling of memory chips by companies concerned about possible Y2K problems could lead to a slump in orders in the first quarter, traditionally a period of low demand. Winbond's Chang sees potential problems later in the year, however. "The end of the second quarter, maybe April or May might be a little bit slow," he said, "but after that, we think there will be high demand." The release of Microsoft's Windows 2000 operating system, expected early in 2000, will help drive DRAM sales. "Windows 2000 will have positive influence," said Chang, "you need more DRAM to support all its features." Microsoft will probably recommend a minimum of 128 Megabytes of memory for PCs which use Windows 2000. DRAM Production is dominated by Samsung and Hyundai of Korea, and Micron Technologies of the US. Between them, these three companies produce about 70 per cent of global output. Taiwan's DRAM makers will benefit next year because, unlike Samsung and others, most have steered clear of the troubled Rambus memory format. Rambus, long touted by US chip giant, Intel, as the future memory standard, has been delayed by technical problems, and is not expected to become dominant before 2001. The global memory chip market will grow 33.5 per cent next year, according to Semico, a US research organization. ®