Fujitsu to accelerate next-generation DRAM production

Fujitsu plans to start producing 64Mbit DRAM earlier than expected in pursuit of higher profits.

Despite a recent upturn in some DRAM prices, the nearly year-long price decline of the chips used as main memory in PCs is driving Fujitsu to the higher ground of the next generation 64Mbit DRAM.

Fujitsu's plan follows similar moves by other top makers of DRAMs, including NEC and Samsung, which both in recent months revised production schedules to include a higher proportion of 64Mbit chips versus 16Mbit densities.

Since early this year, prices of 16Mbit units have fallen, hitting as low as US$6 to US$7, from levels around US$50 a year ago. That has forced DRAM makers to the higher profit margins of the next-generation chips, analysts say.

Though in recent weeks prices of 16Mbit units have risen slightly (See Volatility rules), chipmakers are still scrambling to recover from the unexpected drops earlier this year, analysts say.

As a result Fujitsu will forego previously planned 16Mbit production at its Gresham, Oregon, plant, making a shift from 4Mbit directly to 64Mbit, a spokesman says. "We can use the same equipment but we just won't produce 16Mbit chips. We'll go directly to 64," the spokesman says. "Sixty-four megabit DRAMs are going to be in short supply next year, so as much as we can ramp up the better."

Fujitsu's shift will come in the middle of next year, raising production of 64Mbit DRAMs to 1.5 million chips per month by the end of 1997, a level 500,000 units higher than its original plans, he says.

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