Toshiba shifts to 64-megabit chips

Toshiba has indicated that it plans to cut monthly production of 16-megabit Dynamic RAM (DRAM) memory chips and increase production of more advanced 64-megabit chips, due to dropping prices for 16-megabit chips and the resulting decrease in profits.

DRAM is the principal type of memory used in almost all PCs. In today's PCs, 16-megabit DRAMs are the most popular. Manufacturers are trying to move to the next generation of 64-megabit chips in order to boost profitability since it is more efficient for manufacturers to make the denser 64-megabit chips.

Toshiba will reduce monthly production of 16-megabit chips by one million, according to a report in the Nihon Keizai Shimbun, Japan's largest business daily.

The delivery price of 16-megabit chips to major users, such as large PC vendors, has fallen to around $8, which is close to production costs, the report added.

Toshiba will switch over current 16-megabit production lines to 64-megabit chips, according to the report.

NEC is also cutting monthly output by about three million. Mitsubishi Electric also indicated that it plans to cut monthly production by about three million.

In related news, orders for chip-making equipment fell 35 percent in December of 1996, according to another report in the Nihon Keizai Shimbun.

The drop reflects continued efforts by chip makers to reduce capital spending on chip-making equipment due to depressed sales.