Thanks for the memories — of rock-bottom memory prices
COMMENTARY: Why RAM is going through the roof
By Gary Krakow
MSNBC
Nov. 18 — A few weeks ago I told you about buying memory for my $69 Alpha-chip computer project. I mentioned that the quoted price of $39 (for a 32MB, 8x36, true parity SIMM) in September had gone to $55 in early October, then to $70 by Halloween. I blamed the vendor, but it's not his fault. Now that same SIMM card retails everywhere for a minimum of $89 and more likely $110 … if you can find one for sale. Same is true for most other types of memory chips. I decided to find out why
I'VE SPOKEN WITH DOZENS of resellers on and off the Internet plus a bunch of memory manufacturers. I've heard a pile of disjointed observations like:
“There was too much to go around.”
“Memory use in computer printers is driving up the price.”
“Demand in the Far East has waned, so that supply has landed on the U.S. market.”
“Memory manufacturers were going out of business.”
What I've been able to deduce is that all of these disparate statements are correct. And I can report that everyone, no matter what their particular view of the situation, agreed on one thing: The memory market has bottomed out.
The best explanations came from a computer parts distributor here in New Jersey and from a product support expert who works for one of the big U.S. memory manufacturers: “Memory prices just got too cheap.”
Over the past few years prices for memory chips plummeted. Computer manufacturers started to take the low prices for granted and began to give away memory “upgrades” as sales incentives. (Wintel laptops and the iMac immediately come to mind).
This turned out to be bad business for memory manufacturers around the world. I was told of one instance where a memory chip factory in Scotland, opened with great fanfare by Queen Elizabeth just a few years ago, was now an abandoned building. Memory had become too cheap to keep the factory going. I was told there were similar instances in other countries, especially in the Far East.
And something had to give.
The rumor mill believes that because of low prices and all the stock on hand, the remaining memory manufacturers slowed down production in the past few weeks. You can figure out what happened next. Inventories began to dry up, the supply-demand equation began to shift and the prices began to rise. No one knows (or would go on the record to say) whether memory manufacturers helped this process along. But the people I spoke with all agreed that memory prices had gotten very, very low and that a price rise was long overdue.
Most online sellers I called say their wholesale costs have increased at least 45 percent in the past two weeks. Notice the words “at least.” Some told me certain kinds of memory have increased more like 100 percent if distributors can get them at all. Higher memory prices mean higher prices for devices that use memory. Devices like PCs. Just in time for the big holiday selling season.
What will the future bring? Will the next few weeks mean even more increases in memory prices? And will this start to affect everything that uses memory? Only time will tell. One distributor told me to wait a few weeks. Once production cranks up again, prices should begin to drop. But, on a less cheerful note, he said that prices would never again fall as low as they were just a few weeks ago.
I don't know about “never,” but it looks like the days of dirt-cheap memory prices are behind us. Me? I'm going to wait and see. And hope for the best.
msnbc.com |
