Elpida Memory has moved to scale down production at its DRAM fab in Hiroshima, Japan, as well as production at its Taiwan-based subsidiary Rexchip Electronics, according to industry sources. The global DRAM industry will accordingly see an about 10% reduction in supply, which will helps improve the oversupply situation, said the sources.

In response, Elpida declined to comment citing the quiet period prior to merging with Micron Technology.

Rexchip responded saying its decision to cut back production cutback is aimed at reducing cash outflows.

Monthly capacity at Elpida's 12-inch wafer plant in Hiroshima will cut to 80,000 units from the current 120,000, a more than 30% reduction, the sources disclosed. The cutback targets mainly production for commodity DRAM chips. Of the 80,000 wafers, 60,000-70,000 units are to fulfill mobile RAM orders placed by Apple, the sources said.

Elpida's production cut at its Hiroshima plant could imply that the facility is set to discontinue the manufacture of standard DRAM parts, the sources pointed out.

Meanwhile, Rexchip will also scale down capacity at its 12-inch plant with monthly output shrinking to 50,000-60,000 units - an almost 30% reduction from the current 80,000 units, the sources indicated.