Volatility rules in local RAM market

Local RAM prices are edging up following sharp rises on the Asian spot market.

Local RAM prices are edging up following sharp rises on the Asian spot market. This comes after a period of declining prices. (See Analysts mixed.)

Patrina Gaskin, of Auckland-based RAM chip reseller JDI, says local prices are already on the move.

“We have actually had some price increases over the last week, which will be continuing over the next few weeks,” says Gaskin.

“There has been a decreasing trend up until the last week but we’re not sure where they’ll be going from here.”

JDI sources its RAM from the US.

However, John Bessey, of PC vendor Dell, which buys its RAM in Penang, says the price trend has been steadily downward.

“We’ve probably seen it a bit early with the volumes we buy in Penang,” says Bessey. “Our memory prices have dropped considerably. We’ve seen prices come down over the last three months by around 65%, but it’s needed now with the Pentium Pro and Windows NT.”

“The software now is needing the extra RAM. Three months ago you could get away with 16Mb or even 8Mb, but not any more.”

PC Direct’s Richard Moss, however, agrees with JDI.

“We’re hearing rumours of the price increasing locally. We have a contracted price for RAM and we’ve heard on the spot market the price was going up, so we checked with our suppliers that the contracted price would hold firm.”

Graham Penn, of market research company IDC, says the situation is volatile.

“Over the next little while the manufacturers will have a joint vested interest in getting the price up a little bit,” says Penn.

“The excuse will be they’re moving towards the 64Mb stuff. In the medium term I think we can see some firming of prices but we’re not going to go back to the high prices of 12 to 18 months ago.”

“It’s a pretty finely balanced market--it’s not only demand and supply but product transitions as well, and the two interact and produce some interesting short-term movements,” he says.

Overall, the price drop has seen an increase in the standard configurations being marketed by PC vendors. According to Peter Wolff, an analyst at ING Baring Securities, PC vendors are currently shipping 22Mb to 24Mb of RAM as standard, up from an expectation of 16Mb, and next year this could rise to 32Mb.

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