Elpida, Powerchip to cut DRAM output

(Adds Powerchip output cut, closing share prices)

TOKYO, Sept 9 (Reuters) - Japanese microchip maker Elpida Memory Inc and Powerchip Semiconductor Corp of Taiwan said on Tuesday they plan to cut their DRAM output in an effort to tighten supplies and shore up weak prices.

Makers of dynamic random access memory (DRAM) chips, used in PCs, mobile phones and other electronic products, have seen their profitability battered by sharp price falls, which have come amid an overall economic slowdown.

Dell Inc , the No. 2 PC maker, last month posted a surprisingly steep drop in quarterly earnings and said companies around the world are cutting back on technology spending.

Elpida, the world's third-largest DRAM maker behind Samsung Electronics Co Ltd and Hynix Semiconductor Inc , said it plans to cut output by about 10 percent from mid-September.

Powerchip, Elpida's production partner in Taiwan, said it is starting to adjust its output plan to achieve a production cut of 10 to 15 percent, without giving a time frame.

Elpida said it appears that DRAM supplies are exceeding demand by 5 to 10 percent.

Shares in Elpida closed down 3.8 percent at 2,015 yen, underperforming the Nikkei average .N225, which fell 1.8 percent. In Taiwan, Powerchip shares ended up 1.3 percent at T$4.55, compared with a 3.5 percent drop in the main TAIEX share index . (Reporting by Kiyoshi Takenaka; Editing by Chris Gallagher)