No Way Out for Memory Manufacturers – Kingston

Major DRAM Makers Set to Continue Manufacturing Memory

by Anton Shilov
06/04/2008 | 03:48 PM

There were loads of companies who manufactured dynamic random access memory (DRAM) just a decade ago, however, the majority of them have quit this business due to profitability concerns. Those companies who specialize on memory manufacturing will hardly quit as they have nowhere to run, according to a co-founder of Kingston, one of the world’s largest supplier of memory modules.

 

David Sun, co-founder of Kingston Technology, believes that the current depression on the market of DRAM is different compared to what was on the market several years ago. According to him, when companies that left the random access memory market in the most recent decade, such as Fujitsu, IBM, Mitsubishi Electric, OKI, Texas Instruments and Toshiba, quit, it meant a relief for the remaining players, as it catalyzed decrease in DRAM manufacturing capacity as well as price increases. However, nobody would quit now, Mr. Sun said, reports DigiTimes web-site.

The main suppliers of DRAM are Samsung Electronics and Hynix Semiconductor. Samsung has an extensive product lineup in addition to DRAM business, whereas the product mix of Hynix is very large, which means that the company can enjoy profitability in spite of issues with random access memory prices. Moreover, thanks to partnerships with external manufacturers, Hynix is pretty flexible in terms of inventory.

There are a number of pure DRAM manufacturers, such as Elpida Memory, Nanya Technology, ProMOS Technologies, Powerchip Semiconductor Corporation (PSC) and Winbond Electronics. Neither of them can make anything except memory and will not quit the DRAM market on their own and focus on something else, said Mr. Sun.

Even if a price tumble catalyzes further consolidation in the DRAM industry, manufacturing capacities will not decline, according to the high-ranking executive, which means that prices will not rebound because of this. Mr. Sun says that only rational capacity expansion will eventually allow stabilizing supply, demand and capacities to keep the prices on a firm level.