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Elpida cuts production

Posted: 09 Nov 2010 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? DDR3? memory?

Elpida Memory Inc. made two pessimistic announcements that seem to contradict the trends, according to an analyst.

In a report, David Rubenstein, an analyst with MF Global, said that "On Nov. 1, Elpida pre-announced earnings for the 1H, which were disappointing. The company does not typically forecast earnings at the beginning of the fiscal year due to the volatile nature of DRAM prices. The November 1 operating forecast was below consensus by a large margin and indicating a sharp quarter-over-quarter decline in profits."

He also reported that Elpida had announced it will "cut monthly production by 25 percent, confirming a Nikkei article that stated that the company will cut production." He added that "The production cut is surprising in that DRAM prices are still well above Elpida's cash cost in our view, and should be positive for the DRAM industry in total. Elpida cancelled production additions in its Taiwan (subcontractor) Rexchip last month."

Meanwhile, Samsung Electronics Co. Ltd has become the world's first DRAM maker to ship a 30nm-class device, a 2Gbit DDR3 chip based on 35nm technology, leaving Elpida, Hynix and Micron to compete for second place. In September, Elpida claimed it had completed the development of a 30nm-class 2Gbit, DDR3 SDRAM which the company plans to begin sampling in December of 2010.

Hynix Semiconductor Inc. on the other hand, is showing a 30nm-class DDR3 device, with shipments due in 1H 2011. Micron Technology Inc. has yet to announce its 30nm-class DRAM product.

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