The day Japan’s semiconductor pride collapsed
An independent exercise, not a statement by the video creator or verification of every claim in the video.
When the same price decline turns profit into loss
Suppose a hypothetical DRAM fab sells chips for 100 each, spends 60 in variable costs per chip and incurs 3,000 in fixed costs each quarter. Selling 100 chips gives an operating profit of 1,000. A price drop to 90 with unchanged volume brings profit to 0. If volume also falls to 80 at that price, the fab loses 600.
Check for yourself
- At a price of 90, how many chips does the fab need to sell to break even?
- Which assumptions need to be recalculated if fab expansion changes both fixed costs and sales volume?
Limits of application
This is a hypothetical fab with simplified unit prices and costs. It omits inventory valuation, product mix, capital spending and debt repayments. Operating profit and the cash runway require separate calculations.
- What to look for
- Examine why memory manufacturers took different paths through downturns, from fab investment to sale talks and court-supervised reorganization.
- Why it matters
- Separate the effects of falling prices on profit and cash, and track Japan’s new logic investment through prototyping, customer qualification and volume production.
Timeline
5 segmentsThe video describes how expanded capacity and weaker demand during the financial crisis put pressure on prices and cash flow. Qimonda filed for insolvency in 2009 and Elpida petitioned for reorganization in 2012. Hynix joined SK Group that same year, and Micron completed its acquisition of Elpida in 2013.