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DRAM production slowed

LG Semicon will continue to hold back production of DRAM memory chips.

    LG Semicon, a major south Korean chipmaker, confirmed this week that they will continue to hold back production of DRAM memory chips.

    LG Semicon, Samsung, and other South Korean manufacturers have been reducing DRAM output since last December to avert a collapse in prices for 16-megabit DRAM memory chips, according to the Nihon Keizai Shimbun, Japan's largest business daily newspaper.

    LG Semicon says it has cut production by about 30 percent by shutting down production lines, in an effort to stabilize prices, according to the report.

    Currently, 16-megabit Dynamic RAM memory chips are commonly found in the memory modules in personal computers. Memory modules are the small circuit boards that hold memory chips.

    The companies have been hit hard by the steep DRAM price declines and consequently have been reducing investment in memory chip production. LG Semicon says it will invest $1 billion in semiconductor production, 35 percent less than for the previous year.

    Manufacturers of DRAMs want to eventually move to production of higher density 64-megabit chips because, at least initially, the companies could get higher prices for them.

    LG Semicon says it hopes to raise monthly output of the 64-megabit chips to more than 2 million units by the end of the year, according to the report. The company says it hopes to sell the 64-megabit chips for about $50 for long-term contracts, compared to around $9 for the 16-megabit variety.

    LG Semicon will boost investment in liquid crystal display panels to about $1 billion in 1997, the report said.