Monday, May 3, 2004
Even though the memory chip industry is riding on the crest of the "global boom," the stellar performance could be short-lived because of an expected supply glut in 2006.
Experts on the semiconductor industry predicted that the growth of the memory chip supply is expected to outstrip that of demand, and it could ultimately lead to a "worldwide supply glut" within two years.
"The predominant optimism for robust growth in consumption would propel chipmakers to further expand facility investment and output. It all boils down to price falls and anemic profits," according to an industry official.
With the handwriting on the wall, domestic chipmakers are racing to come up with a solution to the potential crisis.
Samsung Electronics Co, Ltd plans to invest more than 5 trillion won (US$4.39 billion) of its planned annual facility investment budget of 7.9 trillion won into semiconductors, with 3.9 trillion won earmarked for memory-chip operations.
Hynix Semiconductor Inc also aims to boost its spending on 300mm wafer production lines to 1.4 trillion won in 2004 from 800 billion won in 2003.
By: DocMemory
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