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DRAM Manufacturers Ramp Up Production

By - Source: Digitimes | B 29 comments

It appears that the DRAM memory market has bottomed out and prices have begun to stabilize.

Manufacturers have reacted almost immediately and there are reports that vendors are increasing their production volume again. Tier 1 manufacturers cut their production volume in Q4 to halt a dramatic price decline.

According to Digitimes, DRAM producers have added 100,000 wafers to their output in Q1 to move towards a balance of supply and demand. Forecasts indicate that DRAM demand may rise by 30 percent in the current quarter. Digitimes said that average selling prices for 4 GB DDR3 DRAM modules have increased by about 6 percent to $18 since Q4. 2 GB DDR3 DRAM also showed higher selling prices than in the last quarter.

Elpida remains a uncertain variable in the DRAM market, which could make a major impact on near-term DRAM pricing. The company recently stated that it was not able to renegotiate its debt, which caused speculation that the company may now be forced to merge with Micron. Elpida still has until March 22 to come up with a solution to address a pile of $4 billion in debt.

Analysts such as Raymond James’s Hans Mosesmann predict that a Elpida will have a "significantly diminished" capacity to produce DRAM, which could push the prices of the memory higher.

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  • 25 Hide
    amuffin , February 19, 2012 7:26 AM
    vviikkrraannttcan't they do the same thing with HDD?is there anyone who even uses DRAM?

    fail.....
    all of the stuff is flooded and evrybody uses dram, phones computers etc. The very computer you are using is using dram.
  • 16 Hide
    builder4 , February 19, 2012 8:15 AM
    Quote:
    Tier 1 manufacturers cut their production volume in Q4 to halt a dramatic price decline.


    How is this not collusion? Wikipedia states collusion is "an agreement among firms to divide the market, set prices, or limit production", and is this not an agreement to limit production?
  • 10 Hide
    emperorxyz , February 19, 2012 9:06 AM
    builder4How is this not collusion? Wikipedia states collusion is "an agreement among firms to divide the market, set prices, or limit production", and is this not an agreement to limit production?


    I'm guessing they didn't actually have any agreement. They each independently had their financial people tell them that there is a dramatic price decline. Heck, they can notice that themselves, we all have. Knowing that there is a price decline, they each independently decided to cut their production simply because the price they will sell might be actually lower than the cost of production, so they would take a loss on each sale and it doesn't take a genius to decide that they should cut production. The key is they each decided independently from the others without any agreement.

    Anyway, that's the principle. I'm not saying they didn't have any agreement. They might have had in secret. I'm just saying that it is plausible that they each decided to cut production based on the market condition.
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  • 25 Hide
    amuffin , February 19, 2012 7:26 AM
    vviikkrraannttcan't they do the same thing with HDD?is there anyone who even uses DRAM?

    fail.....
    all of the stuff is flooded and evrybody uses dram, phones computers etc. The very computer you are using is using dram.
  • 16 Hide
    builder4 , February 19, 2012 8:15 AM
    Quote:
    Tier 1 manufacturers cut their production volume in Q4 to halt a dramatic price decline.


    How is this not collusion? Wikipedia states collusion is "an agreement among firms to divide the market, set prices, or limit production", and is this not an agreement to limit production?
  • 6 Hide
    alidan , February 19, 2012 8:18 AM
    you know with haveing to much ram... you would think they would invest more in higher density 8gb sticks and make them the norm. drive those prices down to reasonable levels.

    i have 8gb of ddr2, and cant realistically get more ram, because it would be cheaper to get a new motherboard and load that up with 16-24gb of ram than to get 16gb of ddr2... what im waiting for right now is for 8gb sticks to come to a reasonable price. im already constantly using 7.5gb+ right now, i don't even have all the programs i want open.
  • 10 Hide
    emperorxyz , February 19, 2012 9:06 AM
    builder4How is this not collusion? Wikipedia states collusion is "an agreement among firms to divide the market, set prices, or limit production", and is this not an agreement to limit production?


    I'm guessing they didn't actually have any agreement. They each independently had their financial people tell them that there is a dramatic price decline. Heck, they can notice that themselves, we all have. Knowing that there is a price decline, they each independently decided to cut their production simply because the price they will sell might be actually lower than the cost of production, so they would take a loss on each sale and it doesn't take a genius to decide that they should cut production. The key is they each decided independently from the others without any agreement.

    Anyway, that's the principle. I'm not saying they didn't have any agreement. They might have had in secret. I'm just saying that it is plausible that they each decided to cut production based on the market condition.
  • 1 Hide
    memadmax , February 19, 2012 9:19 AM
    Sounds right now a good time to stock up on some ram chips.
    But however, I am afraid of my investment getting trumped by the next gen of RAM, whatever it may be. It seems like a new gen of ram comes out every 4/5 years and DDR3 is at the 5 year mark(serious production in 2007).
    Oh well, we shall see.
  • 1 Hide
    tomfreak , February 19, 2012 9:38 AM
    where is the 8Gb module when you need it to be just as cheap per GB as 4Gb ones?
  • 1 Hide
    Christopher1 , February 19, 2012 11:54 AM
    emperorxyzI'm guessing they didn't actually have any agreement. They each independently had their financial people tell them that there is a dramatic price decline. Heck, they can notice that themselves, we all have. Knowing that there is a price decline, they each independently decided to cut their production simply because the price they will sell might be actually lower than the cost of production, so they would take a loss on each sale and it doesn't take a genius to decide that they should cut production. The key is they each decided independently from the others without any agreement.Anyway, that's the principle. I'm not saying they didn't have any agreement. They might have had in secret. I'm just saying that it is plausible that they each decided to cut production based on the market condition.


    Personally, I am betting more towards the illegal collusion argument here..... seen way too many times these tech companies having 'dirty laundry' come out a few months/years after they do something like this that shows that, yep, they were colluding.
  • 1 Hide
    RealBeast , February 19, 2012 12:32 PM
    8 Gb sticks will come down in price, but what I want to see is better speed and timings on them. Most of the stuff out now, besides being expensive, is only 1333.
  • 3 Hide
    ScrewySqrl , February 19, 2012 12:38 PM
    Realbeast8 Gb sticks will come down in price, but what I want to see is better speed and timings on them. Most of the stuff out now, besides being expensive, is only 1333.



    actually at the bottom, 1333 and 1600 are about the same price for 8 GB (2x4GB), at 4 GB (2x2GB), 1600 is cheaper than 1333.
  • 5 Hide
    stalker7d7 , February 19, 2012 1:01 PM
    builder4How is this not collusion? Wikipedia states collusion is "an agreement among firms to divide the market, set prices, or limit production", and is this not an agreement to limit production?


    Basic supply and demand. Too much supply, and there will be no demand. Too much demand leaves no supply. They're balancing that out to sell at a good price point. If they didn't (and proceeded to continue pumping out more and more dram that wasn't needed) they wouldn't make enough money to support the continued production of unneeded dram.

    This is completely different than collusion. Collusion is if they would limit how much they produce when demand is high. IE if prices were still really high on the ddr3 stuff, and they limited production to pump it higher, that would be collusion. But if it's bottoming out to a point where it's not very profitable, it's not.
  • 4 Hide
    fuzzion , February 19, 2012 1:25 PM
    Wake me up when most games utilise more than 4gb of ram.
  • 2 Hide
    mindbreaker , February 19, 2012 3:29 PM
    If they were all US manufactures there would be a collusion issue but there is little in place in many countries and internationally to stop collusion. If there were, OPEC would be illegal. The best protection against collusion is to have a lot of independent producers. And that goes for any market. Once you get 20-30 producers, supply manipulations get difficult unless they have to rely on the same raw materials suppliers because keeping everyone together and honest becomes impossible just based on some agreement were there is no way to force compliance. This is how ideally a market should run...20 or more independent companies of a comparable product or service available to the consumer.
  • 1 Hide
    cheepstuff , February 19, 2012 10:00 PM
    stalker7d7Basic supply and demand. Too much supply, and there will be no demand. Too much demand leaves no supply.


    You have the right idea, but remember that supply is not based on demand or vice versa, they are independent factors.

    It should actually read: too much supply relative to demand, and there is excessive surplus of a product; too much demand, there is a shortage of that product.

    Discrepancies in how much the producer is willing to produce and how much the consumer wants to consume are solved by changing the price of the product. All of this can happen without collusion.
  • 3 Hide
    back_by_demand , February 19, 2012 10:00 PM
    fuzzionWake me up when most games utilise more than 4gb of ram.

    If all you do is play games buy a console, some of us edit HD video, the LEDs on my Ballistix Tracer go frikken crazy when I set a batch off
  • -2 Hide
    zloginet , February 19, 2012 11:32 PM
    fuzzionWake me up when most games utilise more than 4gb of ram.


    If ssds didn't help gaming would you say other pcs don't need it?
  • 9 Hide
    kcorp2003 , February 20, 2012 4:09 AM
    vviikkrraannttcan't they do the same thing with HDD?is there anyone who even uses DRAM?


    computer illiterate?
  • 3 Hide
    kyuuketsuki , February 20, 2012 5:15 AM
    zloginetIf ssds didn't help gaming would you say other pcs don't need it?

    Why the crap are people bringing up SSDs here. This is about DRAM, not NAND flash memory.
  • -3 Hide
    alyoshka , February 20, 2012 5:28 AM
    This just goes to show that the actual cost of making the RAM happens to be a lot more cheaper then we're actually paying for it. If they had let the production continue without the stop then we would have seen a further drop in the prices, which, the big players didn't want, since the profit margins fall for other companies that are also manufacturing RAM.
    This is a lot like organized crime, but with a white collar. Hopefully one day these chaps will also get caught in the illegal practices rap.
  • 1 Hide
    ghnader hsmithot , February 20, 2012 10:20 AM
    i still wish we could ram up our hdd quantity.Seems like WD and Seagate arent doing anything.
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