Weak demand puts memory makers in trouble

The boost the coronavirus pandemic has brought to the memory chip industry is fading . The drop in prices in recent months has led to pessimistic forecasts from the biggest memory makers such as Samsung Electronics Co and Micron Electronics Co. A number of other companies have pledged to cut capacity plans, fearing a deepening oversupply. Chip executives and industry analysts don’t see a bottom or even a slowdown in price declines until the middle of next year. Memory chips, used in smartphones, personal computers and data servers, are a barometer of the health of the semiconductor industry, which is grappling with a sudden shift from strong developments during the pandemic to a sharp drop in demand. According to TrendForce, the average contract prices for two major types of memory, DRAM and NAND flash, fell 15% and 28%, respectively, from the previous quarter in July-September this year. Prices for both memory chips are expected to drop in the fourth quarter and throughout next year.

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