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Report: Matsushita to end DRAM production

DRAMs may someday be just a bad memory for Matsushita--the company will stop making the memory chips, according to a report in a Japanese newspaper.

Matsushita will end production of DRAM memory chips according to a report in a Japanese newspaper.

Matsushita Electric Industrial will stop producing DRAM memory next month, according to the Nihon Keizai Shimbun; a major Japanese business daily, citing company sources.

A long, relentless decline in memory chip prices over the past several years--though this has seemingly been halted for the time being--has taken its toll on many DRAM memory chipmakers.

Matsushita's U.S. based DRAM-chip-making unit shuttered operations last fall. Japan production will end in April, the report said. The company will concentrate on system logic chips.

Chip sales at Matsushita were about 370 billion yen in 1997, ranking it sixth among Japanese chipmakers, the newspaper said. DRAMs accounted for 15 percent of Matsushita's revenues from chips at one time but the fall in DRAM prices cut this to 5 percent, the report added.

But market dynamics are now apparently headed in the opposite direction. Memory prices have been on the increase for three quarters in a row, according to analysts, showing that the industry's efforts to stabilize the supply of DRAM. chips, combined with solid demand for PCs, are finally paying off for makers like Micron.

Last week, Micron reported profits of $34 million, its first since its first fiscal quarter of 1998, partly due to the strength of memory prices. This is a positive sign, as memory manufacturers have been facing losses or low earnings since 1996.