Micron said it has cut its own capex from $1.8 billion in its fiscal year ending Aug. 31 to $1 billion for the upcoming fiscal year. Citing industry figures, Micron said Samsung will cut capex to $1.8 billion this year from $3 billion in 2000, Hynix Semiconductor is cutting its capex this year in half to $520 million, and Nanya Technologies reducing expenditures 33% to $358 million. Infineon Technologies was reported to be increasing capex 20% this year to $1.2 billion.

David Parker, manager of Micron investor relations, said memory producers had no choice but to cut capital spending when cascading DRAM prices in June crossed the point where they are now below the firms' variable costs. He said 128-megabit SDRAMs are now selling a about $2 on OEM contract pricing and below $2 on the spot market.

Fab utilization rates have also continued to fall, removing any need to invest in new capacity, he said. Parker cited industry fab run-rates at 82% in May, down from 88% in January and over 90% late last year.

However, Parker said Micron is resisting any cutback in its own production of DRAMs, claiming the Boise, Idaho chip maker is one of the few memory firms not scaling back output this summer.

Micron is also going ahead on schedule to install a 300mm wafer R&D fab in Boise, slated to open this fall to develop critical technologies for the larger wafer-size production. But the firm has postponed indefinitely any plans to equip shell fab buildings in Lehi, Utah for starting 300mm wafer production, said Kip Bedard, Micron vice-president of industrial relations.

Separately, Sue Billat, semiconductor analyst with Robertson Stevens publicly alleged what chip makers have privately bemoaned: "Foundries can be blamed partly for the abysmal DRAM prices. When their own customer orders fell, they began shipping DRAMs out the back door to the gray market," she charged, pointing out that commodity DRAMs are one product foundries can ramp up production quickly to offset declining foundry orders.