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DRAM supplies dry up – OEMs face long wait

Memory market continues to be as stable as a drunken uni-cyclist

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DRAM has been placed on allocation by most of the world's top vendors, with no signs of shortages letting up by Christmas. According to Electronic Buyers' News (EBN), the last four years of oversupply have been laid to rest, and manufacturers are admitting that they have sold out of memory. Last week saw Micron Technology telling the world that it would have no DRAM for the fourth quarter. Other vendors have put OEMs on DRAM allocation following underproduction problems exacerbated by the Taiwanese earthquake last month. In a survey by EBN, the only manufacturer not to be talking about allocation was Samsung. Though this seemed largely out of fear. Avo Kanadjian, senior VP of memory marketing at Samsung Semiconductor, was reported to say that the sudden shortages to hit the market meant talk of allocations "only can increase the panic". But Micron last week admitted it was on allocation across the board on 128M-bit and 64 M-bit DRAM, flash and SDRAM memory. "We're forced to turn away a large amount of business, and most of the other DRAM manufacturers are doing the same," said Don Baldwin, Micron VP. Toshiba said it had been warning customers for two months that there would be widespread industry allocation in the fourth quarter. Jamie Stitt, DRAM marketing manager at Toshiba America Electronic Components, spoke of "demand rapidly closing the gap with supply". "We're not surprised, and expect allocations to continue into the first quarter of 2000," added Stitt. Hitachi said current DRAM shortages would be evident for one more month, then full allocation would hit the industry. It added that every DRAM product across the board had sold out. Those surveyed agreed that the recent hype and panic buying had compounded the problem, while extra supply simply wasn't available. UK OEMs said today they were still able to get DRAM through distribution. Though sources seemed at a loss to predict how the situation would affect the market here. Because the UK is very broker-driven, no one knows how much stock is in the market. One source said it could take two to three months before the effect of allocation would be felt in the UK. "No-one knows where the market is going to go," he said. Prices rose to around $16 per 64M-bit chip today, up from $14 on Friday. ®

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