GBI Research Explains How the DRAM Industry Damned Itself

Paul Lilly

Remember when high-end memory kits would set you back several hundred dollars? Those days are long gone, and for various reasons (all of which are great for consumers but stink for manufactures trying to flip a profit), they might never return. One of the reasons is that overclocking no longer carries such a heavy reliance on RAM. Memory is still important, but not like it was in the Pentium IV and AMD 64 era. But the biggest reason manufacturers are stuck in a low price rut is because they're caught in a "vicious circle of oversupply," GBI Research says.

According to GBI Research, there are several factors at play. There's the global economic uncertainty of the past few years, along with more efficient applications that require less memory, both of which have led to an overabundance of DRAM and resulting price drops.

"Prices have fallen so much in fact that manufacturers have been forced to sell these memory devices at below production cost, preventing profit generation," GBI Research says. "In response, manufacturers have been producing DRAM at 100 percent factory capacity in an attempt to claw back expenses, which has only exacerbated the market oversupply problem."

The growing market for portable devices will offer DRAM makers some relief, but it won't be a saving grace. If they're to dig themselves out of the hole they're currently in, DRAM players will have to control supply and demand, GBI Research says.

Image Credit: Tobias b köhler via Creative Commons

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