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Want to Upgrade Memory? Better Do It Now

DRAM makers continue to reduce output, so memory prices could rise.

By Mindy Charski, PCWorld   

For more than a year, consumers have been reveling in low DRAM prices, a luxury resulting from an oversupply of the memory chips. In December Asian manufacturers, the leading producers of DRAM, began cutting back production of DRAM in order to decrease supply and raise prices.

Yesterday LG Semicon, a major South Korean chip maker, announced it will continue to hold back production of the popular 16-megabit DRAM chips, which are the most widely used for personal computers and notebooks.

%dquotThey%squotre just re-emphasizing that they%squotre sticking with the reduced quantities,%dquot said Sherry Garber, senior vice president of Semico Research Corporation. %dquotPrices had started to get so low that DRAM manufacturers were losing money shipping the chips.%dquot

With the street price of a 16MB DRAM chip hovering around $60, computer retailers like CompUSA are also losing money.

%dquotWe have to sell these at the market and that%squots below our cost,%dquot a CompUSA spokesperson said. %dquotWe have been seeing a lot of retailers buying from us because it%squots cheaper than going through wholesalers.%dquot

He noted that a month ago, the memory chip cost $70, while last summer it was $150.

Currently, the average price for a 16MB upgrade is between $90 and $100, according to Brigg Steele, director of sales at Viking Components, a memory upgrade manufacturer.

Garber of Semico said consumers should take advantage of these prices while they can because she expects DRAM prices to go nowhere but up.

Dataquest analyst Ron Bohn said buying right now is a good idea since the Korean-based manufacturers have such an influence on the volatile market.

%dquotKorea is very dependent on DRAM in terms of their export business,%dquot Bohn said. %dquotThey are clearly the key wild-card suppliers this year.%dquot