Prices of 16Mb memory chips were pushed down this week to $3.50 by US-based Micron Technology, as trade wars with Asian suppliers loomed large.
Korean and Japanese manufacturers continue to suffer from over capacity and underpricing on memory. Two weeks ago, both Samsung and LG Semiconductors reported a fall in profits because of low prices and slackness in the market, and the latest move is likely to make their position even worse for the second half of this year.
Yesterday, a group of Japanese memory manufacturers including Toshiba and Hitachi complained that prices of 16Mb parts had fallen in August and would continue to do so.
Now Micron, a US company, has caused fears of a fresh trade war between the US and the Far East on memory. According to John Byrne, joint managing director of Vanguard UK, Micron?s process technology was such that it was able to produce many more chips from wafers, so driving down prices still further.
He said: ?Micron stated it would sell [16Mb] chips for $3.50 while the Korean and Japanese manufacturers had wanted to sell them for $5.?
Meanwhile, prices of 16Mb parts continue to fall in Europe too, said Byrne. That follows a glut of 16Mb parts being offered by brokers as the result of a suspected VAT fraud, where memory purchased outside Europe and so not liable to VAT is sold at knockdown prices.
Byrne said: ?We thought supplies of these parts were now exhausted, but on Tuesday we discovered a fresh batch of 16Mb units being offered to UK dealers.?
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