European DRAM prices soar

Good for vendors, bad for OEMs

DRAM prices have continued to soar in August, surpassing even the most optimistic of last month’s forecasts. 64Mb chip prices shot up to $8.20 by last Friday, compared to $5.50 at the end of July. The bank holiday weekend was again a scorcher – with GSI quoting chip prices as high as $8.70. This leap has taken even those who work in the DRAM industry by surprise. Last month, Alan Stanley, Dane-elec general manager, said he did not expect 64Mb chip prices to exceed $6 in August. According to Dean Johnson, operations director at GSI, the UK's biggest memory broker, no-one can "see an end to the price rises. In the Far East, some manufacturers have the opinion that chip prices could go as high as $9 by the end of the week." Module prices were standing at around $68 for a 64MB DIMM (PC 100) at the end of last week, according to components distributor Dane-elec. Many expected prices to soften over the weekend, but today 64MB modules continued to climb to $70, according to GSI. This compares to around $34 in the first week of July, and around $45 at the end of July. Microtronica said prices had been rising daily, with the biggest spurt in mid-August. And these prices, which show a reversal in the year’s downward trend, are expected to carry on gaining ground into September. By mid-September, module prices are expected to have clawed their way back to their January 1999 level - around $75. But Microtronica put a ceiling of $90 on the price. GSI’s Johnson noted that supply was not brilliant, but then neither was demand. "OEMs are delaying orders – they are nervous because prices usually fall after they rise. "But demand is slowly getting better because everyone’s hand-to-mouth. People can’t wait for prices to drop," he said.®

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