Intel buys into the memory chip market

Chiyo Robertson ZDNet.co.uk

Published: 21 Oct 1998 10:42 BST

Intel has injected $500m (£294m) into US memory chip maker Micron Technology to support next generation DRAM technology and fuel demand for faster, Intel-powered PCs. The sum represents a 6 percent stake in Micron which will in return, develop faster Direct DRAM technology.

Intel fears that shrinkage of the high-speed, memory chip market will slow the development of PCs which, in turn, will have a knock on effect on the demand for its own chips. The memory chip market has witnessed a dramatic slump recently due to over supply. Consequently, prices have nose-dived to half their value in just two years.

The collapse of the D-Ram market forced Fujitsu to close its Newton Aycliffe plant, in the North-East. Other Japanese DRAM manufacturers, including Hitachi, have also scaled back overseas production. Observers believe that the development of next generation memory chips, such as Direct D-Ram, may be threatened by a lack of investment in this market.