Samsung Electronics Reduce 64 Mega D Ram Production

The international market is expected to be influenced by the Samsung`s drastic reduction of the 64 Mega D Ram that has lost its profitability by the plunge of its international price. Samsung Electronics is the biggest manufacturer of the memory semi-conductor.

A related source of the Samsung Electronics revealed yesterday that the company would drastically reduce the production of 64 M D Ram that had lost its profitability by the decline of the international price. ``We set up a plan to reduce the production of 64 Mega D Ram but will decide the ratio and the scale of the reduction, corresponding to the move of the international market,`` he said.

Meanwhile, Jung Woo-Taik, CEO Samsung Corporation Ltd., announced that Samsung decided, at the expanded strategic meeting of the Samsung Corporations, to stop the production of the 64 M D Ram and to increase the production of the 256 M D Ram soon. In addition, the company is planning to rearrange the export items for the high value added products such as Rambus.

Samsung Electronics developed the 64 M D Ram for the first time in the world in 1992 and started its mass production in 1994. 64 M D Ram has been a stable export item, especially when its price hiked up to $ 21.73 each in October 1999. However, the recent price of the 64 M D Ram at the international spot market plunged down to $ 0.91 - 1.15 each, by the decline of the international IT industry and the transition of the main item to 128 M D Ram in the international semiconductor market.

However, Samsung Electronic explained that the company would not stop the production of 64 M D Ram as the company still continues to produce 8 M D Ram for the domestic and international needs.

Chang Che-Shik, the Minister of Commerce, Industry and Economy, remarked at the General Trading Companies meeting including Samsung Corporation, Hyundai Corporation, and LG, that the government will support the 50 percent of the project survey cost for the plant export from July to promote the export.

According to the Ministry, the export of the General Trading Companies from January to May this year has reduced 18 percent compared to the same period of the last year, whose reduction ratio is much larger than average reduction ratio 2.2 percent. As a result, the ratio of the export occupied by the General Trading Companies has lowered to 39.6 percent this year from 47.2 percent of the same period last year.

The CEOs of the General Trading Companies listed the reasons of the declined exports as the reduction of the affiliated corporates and the reduction of the overseas marketing organizations and human resources. And they will back up the overseas resources and try to expand the exports.

Kim Sang-Chul sckim007@donga.com