Japanese chip maker Elpida Memory is ready to shoulder a small operating loss in the fourth quarter of this year and in the first three months of 2008 to take market share from bigger rivals, the company's head said .

Elpida and its larger South Korean rivals Samsung Electronics and Hynix Semiconductor are locked in a waiting game as each looks to the others to cut supply amid weak prices for dynamic random-access memory -- memory chips that are used in personal computers.

"It would probably be a small loss," President Yukio Sakamoto told reporters on the sidelines of Semicon Japan, the world's largest exhibition of chip-making equipment.  A spokeswoman for Elpida said the company would only suffer an operating loss if DRAM prices stayed at current levels.

But Sakamoto, who aims to overtake both Hynix and Samsung, predicts prices to rise next year. Earlier this year, he  predicted a DRAM price recovery in May which never materialised.

"DRAM price falls have hit bottom," he said, adding that PC memory prices are likely to improve in January-March.

As prices fall, Elpida is focusing more resources on what it calls premium DRAM, used in third-generation, or 3G, mobile phones by Japanese carriers. Margins are improving on such chips, Sakamoto said. Its mobile DRAM prices are likely to fall 30 percent in 2007 and again in 2008, less than half the price falls seen in PC memory, he said

Elpida will rein in spending next year as it concentrates on advanced chip-making processes rather than on ramping up capacity.  It plans to start mass production of 65-nanometre chips by March, aiming to pack more power into each chip and lower per-chip costs by shifting to smaller circuits.

By: DocMemory
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