Japan grasps the nettle on DRAM

Japan grasps the nettle on DRAM
Matsushita is the latest Japanese company to exit DRAM business following on from Nippon Steel Semiconductor and Oki Electric. David Manners The reduction in capital spending by the Japanese semiconductor companies suggests that all the main players, except NEC, are de-emphasising their DRAM plans. “During 1998, most of the Japanese DRAM players decided to go out of this business,” said Dr Hajime Sasaki, chairman of NEC. Matsushita is the latest company to exit the DRAM business after it announced that it will stop making and marketing DRAMs for PCs as from this month. It joins Nippon Steel Semiconductor which was sold to UMC of Taiwan, and Oki Electric which pulled out of the business. “The battle is now between the big giants,” Sasaki told Electronics Weekly. The giants are expected to be Samsung, Micron Technology, LG/Hyundai and NEC, although Toshiba points out it has enough capacity to supply between 12 and 13 per cent of the world market. However, Toshiba, Hitachi and Fujitsu are phasing out commodity product to concentrate on the high-performance, high-density, differentiated end of the business (Rambus, Double Data Rate, Virtual Channel etc). Toshiba expects to reduce 64Mbit production by 90 per cent to one million pieces a month by December as it brings up 128Mbit instead. Matsushita’s exit was not unexpected because it had closed down an old DRAM fab in Puyallup, Washington State, USA last year, had postponed upgrading its Tonami DRAM fab, and had put back construction of a fab at Niigata. The company said it will continue to make some DRAM for its consumer electronics division. Mitsubishi Electric is another company de-emphasising DRAM with the establishment of Taiwanese production at Powerchip Semiconductor. So the Japanese capacity to produce advanced DRAM will be well down in 2000/2001 and, without a product to replace it, companies are going to find it hard to make the capital investments which are essential for future competitiveness in semiconductors. Japanese majors semiconductor spend reductions: For the year to March 1999
Hitachi -83%
Fujitsu -54%
Mitsubishi -50%
Toshiba -29%
NEC -16%

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