NEC exec sees further fall in chip prices this year

17 Jun 2002

The price of memory chips for computers will continue to fall this year, cutting into chip makers' profits, an executive of NEC Corporation said.Cecil Conkle, NEC's senior marketing manager for memory products in the U.S., said he sees the price of 4-megabit DRAM chips, currently the most popular size for data storage in PCs, falling by 10 percent or more this year. The price of the 16-megabit chip, with four times the storage capacity of the 4-megabit and likely to replace it as the main memory chip this year, will likely fall 5 percent, Conkle said.

The falling prices come as chip makers like NEC, the world's second largest manufacturer after Intel Corp. of the U.S., step up investment in new chip plants that cost around $1 billion each. Falling prices are a worry because chip makers may not be able to recoup their investment in plants. Fears that all the new plants will produce too many chips has led to drops in chip makers' share prices.

NEC had semiconductor sales last year of $11.36 billion, giving it a 7 percent share of the $154 billion world market. Memory chips make up about 43 percent of NEC's chip sales. Korea's Samsung Electronics Co. is the world's top DRAM maker.