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European DRAM prices soar

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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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