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October DRAM price round-up

Prices fall faster than they went up

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DRAM prices fell steadily in October as the post-earthquake hype subsided and buyers were left holding excess stock. The first week of October in the spot market saw prices still nudging $20 per chip, around $160 for a 64MB module (PC 100), according to Dataquest. This was a drop of around 20 per cent on September's peak in the aftermath of the Taiwanese earthquake. During last month prices continued to fall steadily, bottoming out at around $10 per chip. Things picked up slightly last weekend, and yesterday UK memory distributor GSI was quoting £53.30 ($87.73) for a 64MB module. Dane-Elec was quoting around £60 ($98.66) for a 64MB module. Dean Johnson, GSI operations director, said there was little demand at present for 128MB modules. "People are simply not willing to pay for them," he said. "October was not the best month for DRAM. At the end of September prices were high -– there was a lot of panic and a lot of brokers jumped in. "However, prices came down quicker than they went up, and the whole marketplace seemed to bottleneck," said Johnson. "A lot of companies got punished during the first two weeks of October -– there is a lot of excess stock out there." Richard Gordon, a Dataquest analyst, said: "People were panic buying in September, and a lot of people were speculating on the stock market, forcing prices up." Regarding contract prices, Gordon said prices would continue to firm up, despite softening slightly in the run up to Christmas. Contract prices currently stand at around $12 per chip. "DRAM vendors are setting up the perception that prices are on the rise, which means contract prices are currently higher than on the spot market," he said. ®

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