Original URL: http://www.theregister.co.uk/2001/11/26/infineon_slams_samsung_dram_artificial/

Infineon slams Samsung DRAM ‘artificial pricing’

Scapegoat?

By James Watson

Posted in Channel, 26th November 2001 12:16 GMT

The recent surge in DRAM prices is the result of manipulation by Korean producer Samsung, rather than a ramp-up in demand, Ulrich Shumacher, chief executive of Infineon, claims.

According to Schumacher, DRAM pricing should have dropped due to chip supply still exceeding demand when Hynix's creditors rescued it last month.
Instead, the market has seen pricing claw its way back towards some respectability.

In an interview with the FT, he argues that Samsung pushed prices down artificially to pressure a competitor collapse. After Hynix's rescue it realised that a depressed price point was no longer affordable as a potential collapse was still another four or five months away.

Shumacher's opinion is controversial. DRAMeXchange's opinion on the price hike earlier this month collectively blames major producers controlling shipments, rather than a single company pressuring the market into a change of pricing direction.

And as to the DRAM price rebound, well memory prices always rise at this time of year, as PC system builders scurry to fulfil their pre-Christmas orders.

128MB SDRAM pricing edged towards an average spot price of $1.70 this month - nearing manufacturer cost price of about two dollars - but is playing around the $1.55 mark.

Reg readers reported corresponding price jumps at the retail level in various global regions, including the Netherlands and Canada, saying that prices have "doubled" and "spiked up to 40 per cent in one day", respectively. A Dutch retailer pushed its 128MB SDRAM price from 16 Euros ($14) to 30 Euros ($26).

Following its rescue, Hynix said it will spend more money on new plants next year - despite the fact that many of its rivals are cutting their 2002 equipment budgets. It plans raise capital expenditure by 500 per cent next year, to $935 million, subject to creditor approval.

The same creditors have also said that if the company proves to be unviable, it could be shut down or sold off to creditors. ®

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