Hynix has announced plans to cut DRAM output by 20 to 30 per cent.

The South Korean-based company is also attempting to sell idle factories for an estimated one trillion won ($754.7 million). CEO Jong-Kap Kim recently confirmed that Hynix was in contact with a number of manufacturers regarding its now-defunct Oregon DRAM chip plant. The facility boasted an impressive production capability of 80,000 eight-inch silicon wafers before it was shuttered in August. 

"Those [percentage] figures are big and that may encourage other [DRAM] makers to cut more of their production," Yuichi Ishida, an analyst at Mizuho Investors Securities told the Wall Street Journal. "But the market conditions won't improve unless demand recovers."

The above-mentioned DRAM production cut, coupled with comprehensive government bailout schemes, may have already impacted the struggling industry. Taiwan's DRAM manufacturers recorded an 18 per cent increase in the pricing of 1GB DDR2, while 2GB DDR2 prices posted a 13 per cent jump.

Meanwhile, a number of Taiwanese memory manufacturers have stepped up collaboration efforts with their US and Japanese counterparts in an attempt to source process node technology.

As IT Examiner previously reported, Taiwan has repeatedly urged local memory manufacturers to formulate consolidiation proposals. Taipei also hinted that it would work to avert a mass industry shutdown by extending finacial aid to the failing sector.

"The government will follow the market mechanism, while taking into consideration industrial development and a consensus among the public, to push the nation's DRAM industry forward," said vice economic minister Shih Yen-shiang. He added that Taipei would extend bank loans and had considered purchasing stakes in any new entity.

Shih's announcement follows Gartner's recent warning against a wide-scale bailout of the collapsing industry.

"News continues to show the dire financial situation that most of the vendors are in, with speculation that governments will step in to support the manufacturers," explained Andrew Norwood, research VP at Gartner. "Widespread government support for the industry would be a disaster: It would just prolong the current downturn rather than forcing the vendors to further reduce production or causing consolidation."

Nevertheless, Chii-Ming Yiin, Taiwan's minister of economic affairs, confirmed the approval of a rescue package and the implementation of its various aspects. X

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