DRAM Makers Reported to Announce Lower Capex for 2009

The industry players have announced reductions in spending capital for next year

The weak demand on the market coupled with an increased uncertainty drove DRAM makers, including Micron Technology, Hynix Semiconductor and Powerchip Semiconductor Corporation (PSC), into announcing capex reductions for the year to come. At the same time, other industry players including Samsung Electronics, Elpida Memory, Nanya Technology, Inotera Memories and ProMOS Technologies are also expected to take this step in 2009.

During 2007, DRAM bit growth rate expanded quite aggressively, due to the fact that many industry names were driven by ambitions to expand their support for Windows Vista. Last year, Hynix's capacity grew 159 percent on year, while Inotera followed with 112 percent. Japan's Elpida and Samsung also expanded by 103 and 86 percent, respectively. The Operating System was not as successful as expected, and DRAM makers saw oversupply. This situation made them become a little more cautious about their spending for the coming year.

According to the news site DigiTimes, Micron already announced capex for the fisca 2009 situated between $650 million and $700 million, lower than the previously estimated one, which was set around $1-1.3 billion.

Hynix is also reported to have announced lower capital spending for 2009, cutting it from the initially-announced $491 million to around $390 million. At the same time, PSC, which had a capex of around $606 million in 2008, announced a capital spending down by 50 percent for next year.

In addition to the negative outlook, the news site also reports that some sources at Taiwan's DRAM makers stated that individual capex budgets for 2009 would be mainly targeted for the development of advanced technologies. The same sources are reported to have said that there would be limited funding allocated to construction or capacity expansion during next year. Industry watchers have also said that in 2009 the number of DRAM makers is expected to shrink.

DRAM Makers Reported to Announce Lower Capex for 2009

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