The price of memory chips has hit a low point and will stabilise next year as select makers of the chips begin to roll out next-generation versions of DRAMs, the head of NEC's semiconductor business said last week in a briefing.
Pressure from South Korea's economic troubles, which forced that country's makers of DRAM (dynamic random access memory) chips to raise US dollars by selling chips cheaply, helped bottom out DRAM prices in the first half of this year, said Hajime Sasaki, senior executive vice president at NEC.
But Sasaki predicted that gradual growth in PC sales next year will help grow demand for memory chips.
NEC, one of the world's top makers of the chips, will try to move quickly to next-generation 128MB DRAMs, he said.
To cut its expenses, NEC will begin using Asian semiconductor foundries - manufacturers that specialise in making chips designed by other companies. NEC is now talking to foundries in Singapore and Taiwan, Sasaki said.
The upshot, Sasaki forecast, is that his group, which includes semiconductors and display screens, will return to profitability later next year. The electronic device group will lose 20 billion yen ($256 million) this fiscal year which ends March 31, 1999.