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Memory chip makers plan 40% price drop

NEC, Toshiba, Fujitsu, and other major Japanese memory chip manufacturers are planning price reductions averaging about 40 percent this year.

NEC, Toshiba, Fujitsu, and other major Japanese manufacturers of memory chips are planning a price reduction averaging about 40 percent this year, according to a report in the Nihon Keizai Shimbun, Japan's largest economic daily.

The companies are making these forecasts as they prepare investment and production strategies for fiscal 1996, said the report.

The Japanese memory chip manufacturers are basing their pricing predictions on the 16-megabit Dynamic RAM class of memory chips. Currently, 4Mb DRAMs are the predominant memory chip, but 16Mb DRAMs are expected to become the most widely used memory chip in the second half of the year.

Fujitsu is planning on 16-Mb DRAM prices falling as much as 45 percent from last year's levels.

Cheaper memory chips combined with falling CD-ROM drive prices and lower prices for Pentium-class processors should fuel the trend of lower PC prices this year. Processor suppliers such as Advanced Micro Devices and Cyrix are stepping up price competition against Intel.