DRAM Production Cuts Continue, Time to Stock Up on Memory?

Posted 09/14/2011 at 9:01am | by Paul Lilly

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We've been monitoring the sorry state of the DRAM market closely for some time now, and whenever there's an update, it's almost always bad news for manufacturers. In recent weeks, it's also been bad for consumers who've grown accustomed to rock bottom pricing. Seemingly faced with no other choice, DRAM makers have started to cut production, and it's no longer just one or two companies.

We've reported on this before, but up until this point, DRAM makers have mostly been talking the talk and only a few of them have walked the walk. Now several are falling in line with production cuts. According to DigiTimes, a news and rumor site with its finger on pulse of the DRAM situation, Nanya Technology and Inotera Memories have joined Elpida Memory, Powerchip Technology, and Rexchip Electronics in scaling back production until prices rebound.

With that many DRAM makers pulling in the production reigns, the market might see prices go up as inventory gets low. DRAM makers aren't toying around with minor cuts, either. Nanya decided to cut production by 20 percent. Inotera, which supplies memory chips to Micron (parent company of Crucial), is cutting production by up to 10 percent, while Elpida is on pace to produce 20 percent less chip in the third quarter. But the biggest reduction so far belongs to Powerchip, which cut DRAM output in half.

Ten and 20 percent might not seem so significant, but collectively, this could affect the market. Don't expect prices to skyrocket, though. According to DigiTimes, Samsung and Hynix plan to forge ahead full steam, and between the two, they account for over 60 percent of the global DRAM market.

Our prediction is that memory prices will probably see a bump in the coming weeks and months, but it won't be so significant that you'll kick yourself for not stockpiling barrels full or RAM to offload on eBay and retire wealthy.