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Memory chip prices take a dive

Prices of 4MB Dynamic RAM (DRAM) memory chips to large customers dipped into the 900-to-1,000-yen range Monday in Tokyo, according to Nihon Keizai Shimbun, a Japanese economic newspaper.

Prices of 4MB Dynamic RAM (DRAM) memory chips to large customers dipped into the 900-to-1,000-yen range Monday in Tokyo, according to the leading Japanese economic newspaper Nihon Keizai Shimbun, highlighting a steady drop in memory chip prices since January.

Tokyo prices reflect the supply of memory chips worldwide since Japanese chip companies together compose the largest block of memory chip manufacturing capacity in the world. A thousand yen equals about $9.50 in U.S. currency.

The yen prices reflect the cost of 4MB DRAMs for major purchasers of these chips, or so-called "large-lot" customers such as PC vendors.

The new price drop and Intel's strategy of aggressively cutting the cost of Pentium processors in the last few months are major factors in recent price cuts by large American PC vendors, said Jim Beedle, an analyst at the Scottsdale, Arizona-based marketing research firm Instat. Prices of 16MB DRAMs--which are to eventually replace 4MB DRAMs--are also declining and are down about 18% since early January, to 3,500 yen to 4,000 yen per unit, the newspaper reported.

The fall is blamed on a memory chip inventory build-up by PC vendors as major U.S. manufacturers cut back on purchases of 4MB and 16MB DRAMs from Japanese suppliers, the paper reported.

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