Chip Makers Head for Better Times
Computer-memory chip makers expect to see their fortunes improve next year after two tough years, allowing them to boost capital spending to improve their technology.
Industry heavyweights and observers see the notoriously up-and-down industry turning positive this year. Weak capital investments over the past two years have led to a gradual decrease in global supply of dynamic random access memory chips, which are the main chips used to store data in personal computers. The decrease in supply, coupled with improving demand, has led to a recovery in prices of DRAM chips in recent months.
The launch of the new Windows 7 operating system from Microsoft Corp. (MSFT) may also prompt consumers and corporations to replace their aging computers with new ones that require more memory storage next year, providing a much needed demand boost for DRAM makers.
The recovery in the DRAM market, while a sign that demand in the electronics supply chain is improving, could put pressure on PC manufacturers to trim their component costs to maintain margins.
