Elpida Memory said they will scale back its production output by 20%  to allow prices to bounce back.

Rexchip Electronics, Elpida's production subsidiary in Taiwan, has also built up its "wafer bank" inventory level as a result of slowing demand for PCs, the sources revealed. These excess chips will not be packaged and released to the market as Elpida intends to control output, the sources learned.

The speculation about Elpida's production cutback comes following remarks made by DK Tsai, chairman for memory-IC packaging and testing firm Powertech Technology, that the company expects to see its DRAM clients cut back their production significantly in the third quarter in a move to stabilize chip prices.

Contract prices for mainstream 2GB DDR3 modules stood at US$14.50 in the second half of July, down 9.4%, latest data collected by DRAMeXchange show. Prices for corresponding 1Gb chips have fallen below the US$1 mark.

By: DocMemory
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