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DRAM node migrations to fail in profitability goals, says DRAMeXchange
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As DRAM memory manufacturers migrate to 6X and 5X technology nodes is a bid to reduce die costs and return to profitability, DRAMeXchange believes that average manufacturing costs (material cost plus package and test) will remain higher than the ASPs due to the continued over capacity. With greater efforts to boost node migrations, DRAMeXchange said that the bit growth resulting from more die per wafer will only exacerbate the over capacity situation and result in further price declines.
DRAMeXchange is continuing to urge DRAM manufacturers to make more cuts in capacity than have already been made to solve the problem. DRAMeXchange estimates that currently announced cut backs from PSC, Elpida, Hynix, and ProMOS and Nanya will only result in a total worldwide production reduction of 12-13 percent.
DRAM production cuts of as much as 30 percent are required to return to a supply/demand balance and the industry needs to consider continuing to reduce production by 20% on a long term basis in order for DRAM industry to come back to health, DRAMeXchange said.