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Elpida hikes DRAM prices 20 per cent

Will others follow?

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The last time DRAM chip prices fell into a money pit, in 1999, the big four memory makers dug themselves out by working as a team over the next three years.

OK, so it was price-fixing: understandable, but illegal. Samsung, Elpida, Hynix and Infineon were caught out - and in 2005 had to cough up $730m in fines. Later they dropped a few hundred million dollars more to head off class action suits.

Fast forward to 2008 and the Dramurai again are losing money hand over fist. But this time, there's no hot cartel action to claw back the $31bn industry's record losses.

So Elpida is going it alone, and today is telling the world, it's raising prices 20 per cent in April. The Japanese firm will slap on 10 per cent at the beginning of the month and another 10 per cent in the following contract round, two weeks later.

Demand is up and inventory levels are down, according to Bloomberg, and the other memory makers will surely take their cue from Elpida to raise prices. But for how long? Over-supply is endemic, and memory makers need to shift their stocks. This will not change unless a big DRAM maker throws in the towel. ®

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