DRAM headaches for bulk buyers
Bald memory guru keeps his hair on
DRAM prices have dropped this month, thwarting the efforts of PC builders and brokers that upped stock levels in anticipation of September price rises.
Since the beginning of September, the average price of a 64MB PC 100 Maj/3rd Dimm has fallen in Asia from $68 ($8.25 per DRAM) to $61 ($7.35 per DRAM), according to research by Memory Corp Group. PC133 modules are almost the same price.
Europe is in a pretty similar situation, with only the strong pound lessening the impact.
Memory Corp has tried to analyse the amount of stock in the market. According to their research, almost everyone in the memory sector - including small and big PC builders, PC retailers, dealers, resellers and brokers - increased their stock in anticipation of September price rises and indicate they have an extra two to three weeks' stockholding.
Meanwhile, all the DRAM manufacturers reckon they are still on tight allocation of parts and cannot see supply improving until the start of next year.
Regarding predictions for the run-up to Christmas - as ever, it's like trying to get blood out of a stone. "All betting is off ", according to Memory Corp marketing manager Dave Flack. "The market could swing left, right or just dribble along."
But one thing is certain - the money will lie in speciality memories such as Rambus and DDR etc, which will be in tight supply and keep good prices and margins, said Flack. Also, the supply of original modules will remain "patchy", so offering good profit opportunities to bigger PC builders.
"My personal view is that there is currently enough generic stock about to last beyond Xmas (currently priced at $7.60-$8.00) and that we will see continued price falls below $7/DRAM to possibly nearer $6/DRAM," added Flack.
"If this does happen it will be yet another blow to the DRAM resellers who were all hoping for a September salvation to end their cash and profit problems."
So there could be headaches for many in the industry, who have gone long on risk and bought big, according to Flack.
His parting words were: "Will DRAM Prices rise before Christmas???...Will my hair grow back???" ®