Hynix Semiconductor America Inc., San Jose, Tuesday said it was putting all DRAMs -- both single data rate and DDR products -- on allocation for the remainder of the first quarter. The firm claimed that increased demand and a supply shortfall prompted the action.
Hynix announced its allocation plan late on Tuesday after other DRAM vendors had left their offices and were unavailable for comment.
"Due to recent increased demand and a supply shortfall, Hynix has elected to apportion memory products to its strategic and contractual customers for the remainder of the first quarter 2002," the company said in a released statement.
So far Hynix is the only DRAM vendor to impose an allocation system. A check just last week of other DRAM vendors showed that although the supply of DDR and 256-megabit density chips is tight, firms have been able to keep up with customer needs.
Smart Modular Inc., Fremont, Calif. module maker, earlier Tuesday reported it has been able to get enough DRAMs in the market to meet its immediate needs.
Hynix' action putting all types of DRAMs on allocation also contrasts with usual practices of apportioning selected devices that encounter critically short supply, not the entire DRAM lines.
"The memory market is cyclical in nature -- experiencing oversupply and shortages," said Farhad Tabrizi, vice president of worldwide memory marketing for Hynix, in the released statement. "Customers can achieve a balance through strategic partnerships with their key DRAM suppliers, by forming long-term agreements and building solid supplier/customer relationships."
Hynix' release explained market conditions as follows: "This latest surge in DDR and SDR SDRAM consumption at Hynix has been driven by a number of factors occurring in the industry. Personal computer prices have become more affordable as a result of the introduction of the Brookdale Chipset supporting Intel P4 with SDR and DDR, a reduction in P4 pricing, and a growing appetite for more memory to operate the most advanced operating systems such as, Microsoft Windows XP.
"In addition, an increase of sales in consumer electronics such as DVD, set top boxes and handheld devices, has also fueled memory demand.
"At the same time, inventory levels have been bled off while a number of memory suppliers consolidated and cut back capacity due to IC manufacturers suffering the worse year in history. Plans for new 12-inch wafer fabrication plants have been slow to materialize due to a substantial required investment and no new 8-inch wafer fab capacity has been added," the statement added.
Separately, Hynix Semiconductor Inc. creditors will meet Thursday to consider their next step after Micron Technology last week refused to budge on its offer of $2.5 million to $3 million for taking over seven memory fabs of the Korean chip maker.
Micron on Monday said discussions with Hynix had ended with no agreement and no further talks were scheduled at this time.
However, sources believed Micron had left the door open to resume discussions if Hynix and its creditors backed off their demands for a price several billion dollars above the U.S. firm's offer. It is believed the creditors Thursday willdebate whether to modify their demands and approach Micron once more, but with a proposal closer to the terms that the U.S. memory maker is asking.