DRAM market 'waits for something to happen' says analyst

DRAM market ‘waits for something to happen’ says analyst
David Manners
DRAM manufacturers need a ‘de-tox’ clinic to wean them off the product, said Malcolm Penn, chairman of Future Horizons, at his company’s annual strategic analysis and forecast of the European semiconductor industry in London last week.
“The industry is in a hole but it won’t stop digging,” said Penn, who quoted a Korean industry leader as saying: “One year of windfall profit would more than make up for years of hardship.”
“In the 1993-5 boom the DRAM industry made $2bn profit a month on the 16Mbit DRAM alone,” said Penn, “such happy memories are the reason why most firms are trying to hold on, waiting for the next upswing.” Penn reckoned that “something will happen this year which will take capacity out, and which will lead to a correction in 1999”.
Without a major reduction in capacity, Penn reckons someone will go bankrupt. His forecast of a slight growth in the worldwide semiconductor industry for 1998 to just under $150bn is based on a significant reduction in capacity.
After 1998, Penn’s predictions are buoyant, expecting a surge in industry revenues from 1999 onwards to reach $248bn in 2003. In Europe, Penn expects the semiconductor market to grow 6.3 per cent this year.


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