DRAM industry sits on massive overstocks

Inventory clear-out sees prices fall

ICIS-LOR's latest DRAM market survey makes gloomy reading for memory makers, with prices falling in all three major markets. And there could be more doom and gloom to come: according to "industry watchers" quoted by Biztech Asia, major memory makers still have to shift 20-30 million excess units, on top of the usual stock levels (normally one month's output). Admittedly, there is a huge variance in industry watcher estimates, but it gives some indication of the problems faced by memory makers. How far prices fall depend on how quickly memory makers release their chips. Unfortunately for them, and fortunately for us, there is no de Beers- type central buying cartel, as operates in the diamond industry, to control the flow of DRAM into the market. Memory makers have already begun their inventory fire sale. This saw 64Mb DRAM chips contract prices fall 4.31 per cent in North America, 2.95 per cent in Europe and 4.09 per cent in Asia for the 30-day rolling average to January 21 (compared with the 30 days to Jan 14). Latest prices for 64Mb DRAMs (PC100, 8M x 8) captured by ICIS-LOR were US$9.62 in North America, US$9.87 in Europe and US$10.55 in Asia. The price for 64MB DIMMS (PC100) eased from Jan 14 to Jan 21 by 0.99 per cent to US$64.83 in North America, 0.60 per cent to US$66.73 in Europe and 2.27 per cent to US$64.50 in Asia. ® Asiabiztech.com

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