Will Memory Crash?

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News Item: DRAM contract prices drop 10% in a week.

News Item: From an interview with a Kingston exec: “Over the last two years, the DRAM market has been in generally good health and has managed double-digit growth. In contrast, we expect a slower market in 2005. Perhaps we’ll see a resumption of price wars, and this could make it difficult for some of the smaller module makers to survive this year.”

Combine the two together, and we may see some bargains later this year. A memory exec publicly saying, “perhaps we’ll have a price war” is like a politician saying “perhaps I’ll lose this election” or a movie star saying, “Perhaps my latest movie will flop.” It’s just not something you would normally want to say if you can avoid it, especially in public.

Memory is fairly unique in the computing industry in that it has very exaggerated bust/boom pricing periods. They can skyrocket; they can plummet.

Right now, there’s at least a decent chance they’re going to be going down.

This should not deter you if you really need a new 256Mb module soon.

However, if you’re planning on a multi-gigabyte purchase to fuel some new beast, maybe it would be better to buy it later than sooner. It seems unlikely prices will go the other way with new 0.11 mm capacity coming on line and demand fairly slack, and if they plummet, you could end up with a cheaper multi-Gb beast, or an even more multi-Gb monster.



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