10.02.2001
DRAM production facing cuts

• Development: Hynix, the world’s no. 3 DRAM maker, may cutback production for one week to reduce inventory levels. Micron, the no. 2, may close two DRAM fabs in an effort to reduce capacity in response to weakened market demand.

• Analysis: Global DRAM plays currently hold a 4-week inventory surplus (still on the rise) due to the currently bleak global economic situation. Over-supply remains a major problem for the DRAM industry and demand is unlikely to pick up in the near future. DRAM players currently use die-shrink technology to increase chip output on each wafer by 30%.

• Primasia View: While we view Hynix’s move as encouraging, the over-supply situation is unlikely to see timely resolution.