Feeds

Memory Life's a Roller Coaster!

After the flood, the famine

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

By Alan Stanley, MD Dane-Elec The roller coaster ride continues. Just two months ago anybody that had to sell memory was complaining that there was a glut of memory in the market. Now, look what's happened, a sad lack of abundance. Nitto, nil, diddlysquat, sums up the state of play in today's memory market. Six weeks ago I was asked where I thought the price would be going in the following month. Ha, I said, we are at $5.00 a 64Mb DRAM now. The price will probably rise; it will go up to as much as $6.00. An astronomical price rise in itself, and one that many would never have been believed would happen. Anybody that had predicted it and actually believed that it would happen would have gone on a wild buying spree. But we did not see it. Users have been used to prices falling all this year. Previously, you would seriously question having to pay the same price that you paid the previous week. Most replies I got were not polite. Nobody heeded the warnings and stocked up at a slightly higher price. Well rise it did, I assured people that the $6.00 ceiling was going to sort the market out, that everybody would be happy and we would reach equilibrium. What has in fact been witnessed though has astounded most. Nobody really seems to know exactly what has happened, but at the time of writing, a 64Mb DRAM was difficult to find at $8.00. Amazingly enough a 33 per cent price rise in four weeks is difficult to believe. Hard to grasp for some, others however will remember the days of the Japanese plastics factory fire. A five per cent price rise in two to three days. That mini crisis pushed prices up for 3 months. Manufacturing output has been reduced. Worldwide memory overproduction was flooding the market, resulting in constantly falling prices. The manufacturers had their fingers burnt. Some stopped DRAM production altogether. Others cut back production. The problem was that they were not making money. Price rigging? Not me I have been accused in the past of suggesting price rigging by manufacturers. What people do not understand is that new products don't just happen. New products take many years and millions and millions of dollars to produce. What use is a semiconductor industry that does not make a profit? If we all want bigger, better, faster computers we have to allow these people to make a living. A good living, because profit is needed to finance research and development. So what holds for the future? There has to be a let up in the constant price rises. But they will only occur if and when DRAM produces increase their output. After the lessons they have learnt in the past, it might not be the easiest thing to do. You just can't turn on a tap and double the output of DRAM. Most manufacturers are on allocation, something that three months ago we didn't think possible. They do not (or say they don't) have product stockpiles around the world in warehouses. OEM customers are still getting supplies that they have committed to take from the DRAM manufacturers. What there is very little of is opportune business. You cannot telephone a DRAM OEM today, order some product and expect delivery this side of December. So what's the outcome of all this for the memory user? Well there is a marked decrease in the amount of grey market product. Meaning better quality and stable prices within a defined high and low of about five percent unlike the 20 odd per cent differences that we experienced earlier this year. Prices may continue to rise as the market adjusts itself to the new found levels. Just think of it in the way that you are now paying for all the cheap product that you purchased earlier this year. DRAM OEM's now have to gross 45 per cent more to pay for their losses and leave them with a positive balance sheet before the year 2000. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.