Here's a great article on DRAM pricing....
More reason to buy .25 technology!
Prices augur more memory in PCs
By Michael Kanellos
Staff Writer, CNET NEWS.COM
April 1, 1998, 5:55 p.m. PT ......................................................................................................................................
64-megabit DRAM chips sold for $250 in January 1996, but dropped to $90 by December 1996. The chips sold for close to $45 during the
middle of 1997, but descended to around $28 on contract prices in
November, according to various sources. ...........................................................
Prices for the latest generation of memory chips have dropped down
close to $10 in certain markets, and their continuing plunge will
probably lead to the introduction of high-capacity memory into
standard PCs toward the latter part of the year.
64-megabit DRAM (dynamic random access memory) chips, which are primarily used in pricey servers and workstations, are now selling
for between $10 and $11 in select spot markets, said Mark Giudici,
director of semiconductor supply and pricing at Dataquest.
While the price slide hurts manufacturers, consumers are getting
more memory than ever before. DRAM is used as the main memory in all PCs today.
The phenomenon presages the emergence of mainstream PCs with 64MB (megabytes) of memory standard. Today, most PCs come standard with 32MB. Generally, the more memory a PC has, the faster it performs. But the additional memory may be needed. Forthcoming operating systems such as Windows 98 and Windows NT 5.0 will require more than today's operating software to work efficiently.
Despite production cutbacks by major memory manufacturers, memory prices continue to erode due to a variety of factors, including
excess chip supply, the Asian currency crisis, and improved
manufacturing efficiencies.
The latest drops in 64-megabit pricing are significant in that
prices are approaching four times the price for 16-megabit DRAMs.
Historically, when the 4X price point is hit, computer vendors
switch to the higher density memory.
Mario Morales, semiconductor analyst at International Data
Communications, noted that 64-megabit DRAM prices in the spot market have ranged from close to $11 to $15 while contract prices have been holding at $14 to $15. 16-megabit DRAM, on the other hand, has been selling for around $3, while contract prices have fluctuated from $3 to $3.50. 16-megabit chips are still used widely in PCs.
"We're still seeing 64-megabit price erosion," said Morales.
"64-megabit memory will be in mainstream computers in the second
half [of 1998]." Computer vendors will in all likelihood begin to
devise product plans based around the conversion during the current
quarter, he added.
While Giudici's figures would indicate a crossover from 16-megabit
to 64-megabit chips should be occurring now, the crossover point
will not happen until the fourth quarter, he said. Although the
market price for 64-megabit DRAM in the spot market is at the 4X
point, the contract price is not there yet, and the contract price
is a better indicator of when the conversion will occur. Contract
market prices are generally more stable and relate to large volume
purchases. Spot market dealers are trading lower quantities of
surplus memory.
But while spot prices are often lower and not as accurate a
barometer of the current state of the market, these prices often
function more as a harbinger of trends.
Morales predicted that price stability could return to the market in
1999, adding the caveat that a number of factors could upset this
expectation. Several memory manufacturers are shifting from the 0.35
micron manufacturing process to more advanced 0.30- and 0.25-micron manufacturing processes, for instance. The advances will allow makers to get more memory chips out of each silicon wafer; in turn, that means more and cheaper-to-make memory.
A decline in computer demand could likewise depress memory prices.
Giudici added that the devaluation of Asian currencies will continue
to have an effect. The majority of memory manufacturers are based in
South Korea and Japan. Lower prices could even prompt some U.S.
vendors to raise allegations that foreign vendors are dumping chips,
he suggested.
Larry Dudash |
