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.