DRAM prices expected to bounce back
Has Dataquest changed its mind?
The DRAM market is on the brink of a boom time, expected to start early next year, according to Dataquest senior analyst Richard Gordon. His comments came in response to reports from analysts in the Far East which suggested the DRAM market was about to enter into a period of rapid consolidation with only three major vendors left in the market. Yoshiharu Izumi, market analyst at SBC Warburg Japan, said the top three DRAM makers, Samsung, NEC and Micron would have the market to themselves over the next two years. Izumi predicted that falling DRAM prices would force more manufacturers to drop out of the market. But Gordon rejected this scenario. “The price of DRAM has started to creep up on the spot markets in the Far East,” he said. “There is an expectation that even though the market on the whole is in a state of over supply, there will be shortages in specific product areas.” Years of falling prices had resulted in a lack of capital investment by DRAM manufacturers, this would bring about product shortages, coupled with increasing demand for DRAM this would lead to higher prices - an incentive for more players to enter the market. “The market is turning,” he said. “Starting possibly in the first half of next year we will enter a three to four year boom period for DRAM. Rather than the top three sew up the market, more people will enter it.”