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PC builders nurse ‘heavy losses’ on DRAM stocks

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Falling DRAM prices don't just harm the manufacturers - they also harm what AsiaBiztech calls "White box or non-brand" PC makers in the United States and Europe.

Why? Here is AsiaBiztech's argument: system builders "suffered sluggish sales during the end of last year, and they still have parts in stock. Since the drop in DRAM prices is considerable, they would have heavy losses even if they could sell their products. So small white-box makers will face great difficulties." Hmm.

What small system builder holds DRAM in any quantity - especially at a time of falling prices and oversupply? Why tie up capital in DRAM, when brokers are on hand to guarantee next day, or next week even, deliveries?

Any system builder that has bought too many DRAM modules can cut losses by turfing them back into the brokerage chain. Remember, DRAM is a commodity and there will always be a buyer at the right price.

Asiabiztech has produced one of its regular DRAM contract price surveys from ICIS-LOR. As per, prices are down. Follow the link below, if you want to check out the details.

AsiaBiztech, or ICIS-LOR, reckons that DRAM prices will pick up on the back of cyclical corporate demand for PCs, peaking at the end of the 2001. The introduction of Microsoft's Whistler operating system will also provide a boost. ®

Related link

Asiabiztech: 'White-Box' Makers Face Heavy Losses from Falling DRAM Prices

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