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PSC chair warns of DRAM shortage

Posted: 30 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? inventory shortage? Taiwan DRAM market?

World Semiconductor Council chairman Frank Huang has warned that the aggressive capacity cuts in DRAMs over the past few months are likely to lead to significant shortage by the end of the year.

Huang, who is also chairman of Taiwan chipmaker Powerchip Semiconductor Corp. (PSC), said at a conference that the industry would begin to recover by 2H of this year, and downstream producers of PCs and other electronic products will face "a shortage bigger than I have ever seen in the past 16 years ... this will affect global PC shipments."

Inventories in the DRAM sector will likely be depleted by June, said Huang.

Global DRAM makers have been suffering from major losses following the plunge in chip prices from the Q2 07. This prompted the biggest manufacturers, mainly in South Korea and Taiwan, to cut production aggressively. German DRAM maker Qimonda, meanwhile, is struggling with insolvency.

Huang said part of the reason for the impending shortage was that most DRAM makers would find it hard to revive production quickly. The other reason is that the "wolf has been cried too many times [on a market recovery]. Everyone is too cautious," he said.

He added PSC and Rexchip, its joint venture with Japan's Elpida Memory Inc., would wait until prices rebounded before drastically increasing production and building up inventory.

Taiwan DRAM venture
Huang suggested this expected change in the supply and demand equation would also prompt the Taiwan government to re-assess its plans to restructure the fragmented domestic industry through the creation of Taiwan Memory Corp. (TMC), a partially state-owned company aimed at ensuring Taiwan remained a competitive force in the DRAMs sector.

TMC is due to announce next week whether it will partner with Elpida or the U.S.-based Micron Technology to achieve this goal.

Huang also played down the possibility of Elpida partnering with TMC, and said his companies would have nothing to do with the government entity. He also denied reports that PSC would sell its entire stake in Rexchip to its partner Elpida.

- John Walko
EE Times Europe

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