Weakened by a collapse in prices that began over a year ago, the
world's dynamic random access memory (DRAM) manufacturers will face
even lower sales in 2002, according to market research company
Dataquest.
Worldwide sales are expected to be $10.5bn (£7.27bn) this year, a
large drop from the $31.5bn estimated for 2000, said Dataquest.
Next year the market is expected to shrink further to $8.5bn.
Dataquest predicted that DRAM makers would continue to lose money
until the end of next year, and that this situation could lead to
the failure of some companies.
South Korea's Hynix Semiconductor (formally Hyundai Electronics),
one of the world's largest manufacturers of DRAM chips, is already
on the verge of bankruptcy. It has rescheduled debt repayments
several times and is currently shedding non-core units in an
attempt to stay afloat.
Samsung Electronics ranked number one among DRAM makers in 2000,
with a 21.1% market share, said Dataquest. Micron Technology was in
second place with an 18.9% share, followed by Hyundai Electronics
at 17.2%.
The rest of the top ten were: Infineon Technologies: 8.5%; NEC:
6.7%; Toshiba: 6.2%; Hitachi: 3.9%; Mitsubishi Electric: 3.1%;
Mosel Vitelic: 2.8%, and Winbond Electronics: 1.9%.
Dataquest's warning came as spot prices for DRAM chips continued to
fall on world markets. In Asia, the spot price for 128Mbit PC133
DRAM chips - a component now becoming standard in many PCs - stood
at around $1.00 on 17 October. Three months ago the same chips were
trading for around $1.65, while at the beginning of the year their
price was $5.40 per chip.
The upside of this situation for consumers is that computer memory
is now very cheap and loading a machine up with 256Mbytes of memory
costs a fraction of what it did a year ago. The failure of a major
memory chip maker would be likely to push prices up because the
closure would lead to lower chip production volumes.
Consolidation has already begun in the sector. Earlier this year
NEC and Hitachi merged their advanced DRAM operations into a single
company, called Elpida Memory.
Japan's leading business newspaper recently reported that Toshiba
was in the final stages of discussion with Infineon on the creation
of joint ventures for both DRAM and flash memory chips.