The consistent DRAM trough has grown increasingly bleak even though some players have announced production cuts, according to A-Data Technology chairman Simon Chen, adding that he believes an improvement is only likely if someone exits the market. This also applies to the NAND flash market, Chen added.
Despite that both Elpida Memory and Powerchip Semiconductor Corporation (PSC) have announced they are to cut DRAM production, Chen argued that the moves are not having an effect, the present oversupply is still unsolved. Chen estimated that a market equilibrium will not be seen over the next two months.
A meaningful resumption of supply discipline will only be seen if someone quits the market, reducing overall capacity, Chen said. It is no longer an issue of profit or loss, but a game for survival, Chen noted. He urged upstream DRAM makers to cooperate and agree not to continue expansion.
Chen stressed that 2008 has been the worst year for DRAM he has seen over the past 15 years. An over-estimation of demand catalysts from Microsoft's Windows Vista launch and solid-state disks (SSDs) are the major cause for the present memory trough, he explained. Regarding NAND flash trends, Chen said industry players are indifferent to Hynix Semiconductor's plans to cut capacity. Pricing is no longer an issue, but demand is still sluggish.
Speaking as a memory module supplier, Chen said the only way to survive will be to maintain cautious inventory control with sufficient cash. A-Data had an inventory turnover of five weeks as of late August and the amount should decrease to four weeks in late September, he guided.
Article translated by Esther Lam
