With 2Gb DDR3 prices having tumbled to near cost, Elpida Memory reportedly has decided to scale back its output to allow prices to bounce back. The Japan-based DRAM chipmaker plans a production cut of about 20% for the third quarter, according to industry sources.
Rexchip Electronics, Elpida's production subsidiary in Taiwan, has also built up its "wafer bank" inventory level as a result of slowing demand for PCs, the sources revealed. These excess chips will not be packaged and released to the market as Elpida intends to control output, the sources learned.
When asked whether fellow Taiwan-based DRAM producers would follow suit, Powerchip Technology said it is considering the possibility whereas Nanya Technology and Inotera Memories claimed they have no plans to do so.
DRAM makers' previous cutbacks were carried out in the second half of 2008, when the global financial crisis hit.
The speculation about Elpida's production cutback comes following remarks made by DK Tsai, chairman for memory-IC packaging and testing firm Powertech Technology, that the company expects to see its DRAM clients cut back their production significantly in the third quarter in a move to stabilize chip prices.
Contract prices for mainstream 2GB DDR3 modules stood at US$14.50 in the second half of July, down 9.4% Prices for corresponding 1Gb chips have fallen below the US$1 mark.
In other news, Powerchip, Nanya and Inotera have all reported net losses for the most second quarter on sluggish PC demand resulting in continued DRAM price falls. Powerchip is moving to expand its foundry business while Nanya and Inotera have been devoting efforts to products targeting non-conventional PCs, the companies said previously.