Oh-Hyun Kwon, Semiconductor Business president at Samsung Electronics, made an appeal at the GSA Memory Conference on March 16 to DRAM makers to avoid seeking capacity expansion blindly but focus on product value and stabilize product prices. Frank Huang, chairman of Powerchip Semiconductor Corporation (PSC), raised his agreement with Kwon.
Kwon noted end-market demand is expected to gain strength throughout the first half of 2010, but the focus for the latter half of the year is whether price stability can be maintained. Kwon urged DRAM producers should avoid any overcapacity situations, and turn their attention to developing advanced process technologies and high-value added products.
Huang, echoing Kwon's remarks, said that excessive capacity expansion will only lead to over-supply and price collapse.
Huang also indicated that the DRAM market is happy to see tighter supply, but not a shortage, as the latter induce price volatility. Prices should be in the US$2.5-3 range to maintain a healthy supply/demand situation.
DRAM makers spent big sums expanding their capacities from 2005-2007, resulting in a serious oversupply that plunged prices. Since early 2007, these DRAM companies have incurred a combined operating loss of nearly US$16 billion, according to iSuppli.
In other news, Kwon revealed 50nm is currently Samsung's major DRAM process technology for making 2Gb chips. The vendor expects to migrate to 20nm-class production for 8Gb products in 2012. As for NAND flash, Samsung mainly produces 32Gb chips using 30nm-class nodes in 2010, and will migrate to 10nm in 2012, according to Kwon.