PSC chairman Frank Huang explained a 20-25% overall DRAM production cut is necessary to to cause a rebound in DRAM prices:
. The output reductions would help stabilize DRAM prices, which are expected to stop dropping from the second quarter of 2009, indicated Huang.
The "L-shape" trend in the DRAM industry and the global slowdown has prompted branded system vendors to cut orders significantly, said Huang, noting that related peripheral and component makers have generally suffered a sequential 30% drop in monthly revenues. A recovery is hardly expected in the industry due to poor order visibility, Huang added.
The average selling price (ASP) for DRAM has slid 70% this year, which is estimated to narrow the industry's overall production value to US$27 billion, according to Huang.