Thought this might be interesting -
Reduced demand last year led to price erosion such that most
manufacturers where shipping chips below cost for most of the 2001 year
past.
While overall PC sales remain weak: Memory prices have risen and are
expected to continue to rise for the following reasons;
1. Many non DRAM specific makers have converted their fabs to make
something else or have exited DRAM business altogether, the best example
is Toshiba.
2. Intel has now endorsed DDR with the release of the 845D motherboard
which has lead to all fabs reseting production lines to increase the
proportion of DDR that they make.
3. As prices have been below cost many older inefficient fabs have been
decommissioned or sold for other uses.
4. As prices have been so low, fabs have taken this opportunity to
introduce die shrinks so that they can move production from core 128Mbit
parts to 256Mbit.
5. Last year developed into a price war with all major fabs attempting
to maintain their market share by cutting chip prices. This led to a
belief that the market price problems would be fixed by removing one
major
supplier (like Hynix) following the creditor refinancing of Hynix,
prices immediately started to rise and have continued that rise.
So overall a combination of long and medium term supply reductions in
SDRAM together with increased demand for DDR have caused the industry to
reverse their price war.
How High will Prices Go?
In this early phase of recovery we suggest that prices will rise to the
component cost. This means that prices will rise at least another 15% in
the very short term.
What Will be Market Trends in Q1 2002?
We expect that prices will continue to rise throughout the qtr and that
some items such as 512M in SDRAM and any DDR module will be under
extreme supply pressure.
Keith Palmer
Zytech Marketing Pty Ltd
PO Box 342 Bunbury 6231
Phone: 0419927101 Fax: 0897915900
the online FireWire data storage store -
http://www.zytech.com.au/
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http://www.zytech.com.au/contact.html
