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DRAM Prices Soar Despite Large Oversupply

By - Source: Tom's Hardware US | B 8 comments

The price of DRAM continues to soar for the second week in a row after a major DRAM manufacture files for bankruptcy.

DRAM prices continue to surge upwards after Qimonda, a major DRAM manufacture, filed for bankruptcy an hour before the Asian market closed on January 23, 2008. The price of 1Gb DDR2 667 MHz DRAM chips already increased 16-percent last week, with average prices for all DRAM capacities rising by as much as 8.7-percent during that time. The worst may yet still come however as prices are further increasing this week as brokers and traders in Taiwan and China return from a week long Lunar New Year holiday. China has the largest spot market for DRAM as it is where many of the world's PCs get assembled.

Despite the recent hike in DRAM prices though, market researcher IDC is expecting prices to begin trending downwards in the long-term as there is a large oversupply of DRAM in the market.  Qimonda is still manufacturing DRAM, despite the bankruptcy, but even if it were to stop all production, there would still be more than enough DRAM in the market to meet all demand. The current global economic crisis has resulted in a decrease in the demand of consumer electronics, which puts pressure on DRAM makers.

As of Tuesday this week, DRAM prices were still trending upwards, but the market demands had stabilized.  Even though this recent shock to the highly-sensitive DRAM market may soon pass, there may be more shocks soon to come. ProMOS Technologies is one such company that may soon be forced to follow the lead of Qimonda, as it is currently facing a $330M debt that it needs to payoff by the middle of February.  The Taiwan-based company is appealing to the Taiwan government for funds as it cannot pay off the debt itself.

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  • 0 Hide
    Pei-chen , February 4, 2009 5:45 PM
    It is time to stock up on DDR3 as it won't be long before a gig cost $100 again.
  • 0 Hide
    falchard , February 4, 2009 6:19 PM
    I think it depends on how the market plays out. I doubt it will go up too much as research has been put into cheap high volume ram going passed what many motherboards can hold.
  • 1 Hide
    crockdaddy , February 4, 2009 8:18 PM
    I am betting some of these asshat companies will be investigated again.
  • 0 Hide
    eklipz330 , February 4, 2009 11:45 PM
    what goes up must come down?
  • 1 Hide
    Christopher1 , February 5, 2009 7:06 AM
    crockdaddyI am betting some of these asshat companies will be investigated again.


    Bingo! I think this is another case of price manipulation. Sure, a company has gone out of business or is 'planning' on going out of business... but there is NO reason why that should have an IMMEDIATE effect on the prices of DRAM... NONE!
  • 0 Hide
    mtyermom , February 5, 2009 12:22 PM
    Large oversupply of parts, continually decreasing demand... and prices are increasing???
  • 0 Hide
    restrain_oligopolies , February 5, 2009 1:03 PM
    Current prices are so much lower than 2 years ago that memory purchases are way above 2 years ago.
    A dozen years ago, I bought memory for $40 a megabyte,
    feeling like royalty with 8 megabytes.
    The amount of memory I put in my computers today, 2 gigabytes,
    a dozen years ago would have cost
    $80,000.
    .
    For the cost of 8 megabytes a dozen years ago,
    I could now buy about 30 gigabytes DDR2.
    If my motherboard could take 30 gigabytes and
    if a 64-bit operating system would run all my software,
    I would install 30 gigabytes of memory.
    .
    I don't buy more memory because my hardware and software will not accommodate more memory.
    For me, the main issue is not the price of memory, but the ability of hardware and software to accommodate more memory.
  • 0 Hide
    crockdaddy , February 5, 2009 1:19 PM
    DRAM prices remind me a bit of gas prices. Let's see. Cost per barrel of oil keeps dropping, yet my cost per gallon is .55 more than two months ago?? Hmmm .. .magically the US refiners all had to do maintenance at the same time. Collusion? Maybe, maybe not ... I'm just saying. Asshats ....

    I do agree with restrain_oligopolies ..... RAM prices are not my main complaint. Owning a motherboard that would actually accomodate 16 GB of RAM is somewhat difficult to do. If only I could get a board with 8 banks open lol then I could easily score 16 GB for a few hundred bucks @ 2GB dimm sizes.