Taipei, Sept. 23, 2008 (CENS)--Industry watchers estimate that global supply of standard DRAM chips to fall 3-3.5% once Hynix Semiconductor Inc. cuts its output by 20%, a plan announced recently.

Hynix is currently the world`s No.2 DRAM supplier by filling 20% of the global demand. Its cut would revive the stumbling DRAM market, which has collapsed due to oversupply worldwide. The firm announced it would phase out producing 200mm wafer fabs from standard DRAM chips.

Online clearinghouse DRAMeXchange estimated that the reductions announced by Hynix, PowerChip Semiconductor Corp. (PSC) and Elpida Memory Inc. would equal 5-6% of global capacity, with such reduction likely to increase to 8-10% should more suppliers join the supply chain.

Industry watchers believe ProMOS Technologies Inc. and Inotera Memories Inc. would join the rank soon. Some reported Inotera had covertly cut output 10% while ProMOS would follow suit, a move that the firm has not confirmed.

Fueled by Hynix`s plan to cut output, spot-market prices of the chips rebounded last Friday, with DDRII 1GB ETT chip trading 0.89% higher at US$1.35 apiece.

The DRAM market has been sluggish for two consecutive years, miring suppliers in difficulty and low cash-flow.

The massive output reductions is expected to cap the reckless competition soon, balancing supply and demand in second half next year.

(by Ken Liu)