Memory prices on rise before quake

Computer memory prices were rocketing even before the Taiwan earthquake hit - and the price of base silicon is now triple what it was six months ago.

Memory prices were rocketing even before the Taiwan earthquake hit.

"Memory's a commodity. If you draw a graph you'll see a glitch with the earthquake but it was rising long before then," says local assembler TL Systems' general manager, Steve Price. He puts the problem down, in part, to changes in the manufacturing sector in Taiwan, along with a shift to a newer, faster standard for SD-RAM — 133MHz instead of 100MHz. Pricing for RAM started to rise in July and August, when it started out at around $US50 for a 64Mb module. Today it's worth roughly three times that.

"There have been a number of changes in the production cycle," says component supplier Hypertec's national sales manager, Kris Kincaid. "Part of that is the transfer from 16Mb to 64Mb technologies to the newer 128Mb to 256Mb technologies."

Then there is the seasonal problem of OEMs (original equipment manufacturers) releasing their new models for the Christmas rush.

"So we've had a squeeze on one particular segment of the RAM market and that's pushed things on. By September the price of the base silicon had nearly doubled in the space of just over two weeks."

The earthquake only added to supply problems, according to Kincaid, who says a number of RAM manufacturers in Taiwan have turned their attentions to other aspects of the industry and have "quietly got out" of the RAM market.

"It's your classic squeeze play with less supply and more demand," says Kincaid.

One company that has managed to avoid the RAM price rise problem is the PC Company.

"I'd like to be able to say it was through really good management but it's because we've been so busy we've had to plan a lot better," says managing director Colin Brown. He had committed the company to three months' supply of RAM just before the prices started to rocket.

As for the future — don't expect prices to fall as far as they've risen.

"There's no way it will drop back to the levels we saw it at three months ago," says Kincaid. He believes it will take the Taiwanese factories some time to get back to the pre-quake production levels.

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