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Taiwan reacts calmly to DRAM allegations

Taiwan reacts calmly to DRAM allegations

Micron Technology's allegations that Taiwanese vendors are exporting DRAM (dynamic random access memory) chips to the US at below cost are not likely to have any major repercussions on the island, industry officials and analysts said.

The Idaho-based company said in a statement last week that it has filed a petition with the US Department of Commerce and the International Trade Commission, alleging that Taiwanese companies are exporting DRAM chips and modules to the US at prices which are lower than their manufacturing costs. If the Taiwanese exporters are found guilty of dumping, the US could impose punitive tariffs on Taiwanese DRAM imports.

But industry watchers were sceptical of the ultimate impact and merit of the complaint.

"These guys are not setting DRAM prices, they are price takers," said Don Floyd, semiconductor analyst at the Taipei office of ING Baring Securities (Hong Kong). In other words, they are selling at the prevailing market price.

Although Taiwan produces as much as 10 per cent of the world's DRAM supply, only a small portion of that is sold under the brands of local vendors, of which even less is exported to the US, said Floyd.

"Such imports are causing material injury to US DRAM producers," alleged Micron, the largest of the remaining few US DRAM makers, in the statement.

Officials from Taiwanese DRAM makers reacted calmly to the allegations.

"All of our products are sold under the Mitsubishi brand, so I don't see how this will affect us," said a spokesman at Umax Data Systems, which makes DRAMs in a Taiwan-based joint venture with Japan's Mitsubishi Electric.

With only a few Taiwanese DRAM makers selling the chips under their own brands, and some others, such as Acer Semiconductor Manufacturing and Mosel Vitelic, dropping DRAMs in favour of contract manufacturing, some analysts questioned the timing of Micron's complaint.

Plummeting prices

Scared off by the plummeting DRAM prices, Taiwanese makers, since around mid-1998, have also pulled the plug on expansion plans, with capital spending now at a virtual standstill, he added. "Taiwan is not spending recklessly, why Micron is going after them now I don't know," said Floyd.


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