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Memory Chip Makers Can Forget The Bad Times


Developments to Watch

MEMORY-CHIP MAKERS CAN FORGET THE BAD TIMES

First, the global recession pummeled Japan's electronics giants. Then, as the dollar tumbled, their earnings in America declined in value when translated back into yen. Hitachi, Toshiba, and Mitsubishi Electric, for example, will all take heavy currency hits in the fiscal half ending next September.

But there's bright news coming. The $19.3 billion memory-chip market is pulling out of its four-year slump. The reason is continuing strong sales of personal computers and workstations in the U.S. Dataquest Inc. director Lane Mason says profits of PC and workstation chips--DRAMs, SRAMs, EPROMs, and flash memories--should be up tenfold this year over 1992, thanks to a more even balance of supply and demand.

"We're at the beginning of a cyclical upturn," says Mason. The Japanese electronics companies--which dominate the worldwide market--didn't pump additional billions into new plants last year. So now they're able to keep prices high. Their chief competitors, the Koreans, can't build new memory-chip plants fast enough to make much difference for now.EDITED BY WILLIAM D. MARBACH


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