The memory market is set to hit rock bottom in 2002 after suffering a huge decline this year, according to Gartner Dataquest.
A report from the analyst said that, despite the 67 per cent shrinkage that hit the market this year, 2002 is likely to see a further drop of nearly 20 per cent.
Gartner warned the market to prepare for consolidation in the face of mounting losses, which are throwing prices even below the cost of production. The report's author, senior analyst Andrew Norwood, said that we could see some companies go bankrupt.
He expected to see the first signs of consolidation or bankruptcy early next year with Dram prices probably bottoming out in the second quarter. Gartner estimates that the worldwide Dram market will amount to only $10.5bn, just one fifth of the 1995 value.
Norwood pointed out that Hynix Semiconductor, the world's third largest Dram producer, was already feeling the pinch and suffering financial weakness. While Toshiba and Infineon, the fourth largest memory manufacturer, were in discussions to merge their Dram business.
The analyst added that, when the recovery period eventually starts, the market is only likely to see four main players still standing, rather than the current six.
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