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Memory claws its way back

PC133 to reach volume end of year

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Opinion The memory market is currently on the up, clawing its way slowly out of one of the biggest troughs in many years. SDRAM, presently the biggest volume product, has been in oversupply. Manufacturers have been overproducing during the first quarter 1999, for a market that has not expanded to prediction. Realising this, most have cut back production and are now able to sell at a profit, something that has not happened since January 1999. The first half of the year has been tough, with a capital 'T'. Dane-Elec has witnessed a lot of its competitors closing down or ceasing to sell memory. As for the resellers, memory sales are linked to PC sales and these have been dire this year so far. However, looking on the bright side, we are very optimistic about the balance of 1999 and expect to reach or exceed targets by the end of the year. All predictions show that the memory market is always growing, although sometimes at a lesser pace than at others. Historically, there is always a year on year revenue growth, it all comes down to supply and demand and whether a balance can be kept. People still need computers, and therefore memory, so as long as there is a computer market the memory market will follow. This year has been below expectations, but seems to be picking up now and is expected to stay this way for the remainder of 1999. Looking ahead there are several developments that are likely to affect the memory market in the new millennium. Flash is an up and coming arena that I believe is going to take off 'big time' over the next year, with a four-fold increase in units sold by end 2000. VRAM sales are fairly static and likely to stay this way, fixed by the number of PC's sold. Although talks of 32MB and 64MB cards being developed are busy circulating. We know from earlier this year that there is capacity to produce this product, and manufacturers will use their facilities to the full if they see the demand. Other products like set top boxes are also likely to increase the world wide volume of memory that is required. Another new technology likely to drive the market forward and the cause of recent problems is Rambus. Rambus is much harder to manufacture than PC100, the modules are harder to build and consequently will be a lot more expensive. Most DRAM OEMs realised that in order to produce Rambus in volume (which was forecast for end Q1999) they would have to increase production capacity as they expected to get a much lower yield per silicon wafer. Hence the overproduction this year. Rambus still has not taken off -- PC133 is just another variety of SDRAM. We expect volume sales to start during Q4 1999. Price will be slightly higher than PC100s, the only problem will be having yet another product line to stock. Difficult for the brokers, not for the distributors and manufacturers. ® Alan Stanley is UK managing director of memory company Dane-Elec

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