An internal document from Simm manufacturer Kingston Technology said today that the industry depended on Dram prices rising for its survival. But a combination of different factors including the EU reference prices means there is a current shortage of both EDO and fast page mode Dram while Synchronous memory will also be in short supply by the end of the year.
In a white paper sent out to its channel partners, Kingston said that last year memory prices dropped below cost for manufacturers. The major players reported drops of 90 per cent in overall turnover.
The Korean manufacturers, Samsung, LG Semicon and Hyundai together own 35 per cent of the entire Dram market and that meant that South Korea would be financially devastated if the situation continued. When the three chaebols cut their production by nearly 40 per cent earlier this year, as previously reported, that move cut the worldwide memory supply by between the 15 to 20 per cent mark.
According to Kingston, the Japanese manufacturers of Dram have not increased production because if they had done so, the Korean makers would have to follow. ?The industry would have self destructed,? said Kingston. ?The repercussions to the computer industry would be several years of memory allocations because companies would not be able to afford the high cost and risk of entering the market,? the paper continued.
Other factors affecting the industry include move from 16Mbit to 64Mbit technology and a largescale move towards Synchronous Dram (Sdram).
According to Kingston, the mix of all these factors have created a shortage of the chips used in 4Mb and 8Mb modules while 4Mbit Dram chips, which are used in 16Mb and 32Mb Simms and Dimms have increased in price.
At present there is a shortage of fast page mode and EDO chips while Synchronous Dram is likely to be in short supply towards the end of the year.
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