DRAM Makers Mull Production Cuts to Inflate Prices

Paul Lilly

Here's a reality check for anyone who's complained about the price of RAM recently. The year was 2006 and I was wrapping up a review of a Kingston HyperX 1GB DDR2-1066 kit for another publication. I looked up the street price and found it was $250, which at the time was on the high side of normal for a 1GB kit at that frequency. A 2GB Crucial Ballistix DDR2 kit was selling for $400 that same year. Back then, it wasn't cheap being a PC balla. And today? You can pick up an 8GB Kingston HyperX DDR3-1600 kit for $65 shipped. Times have changed, and for DRAM makers, it hasn't been for the better. That's why they're considering production cuts.

According to news and rumor site DigiTimes , DRAM farmers are mulling cutting their crops to stop the downward spiral in prices. To wit, spot prices for 2Gb DDR3 chips have fallen below $1.20. DRAM prices are now below cash cost levels, and while shifting to a 30nm manufacturing process will help, 40nm will remain the dominant process technology through the end of 2011.

If DRAM makers are to stop the bleeding, they'll need to slow down production, eventually driving prices up. But before you get carried away and stockpile a bunch of RAM, you might not even notice the nominal price hike. Moreover, DRAMeXchange predicts spot prices will continue to trend downwards throughout the rest of July.

Image Credit: Kingston

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