The dirty little secret about DRAM is that we're all underpaying for computer memory, and most of us know it. When the DRAM bubble burst, prices plummeted faster than Lindsay Lohan's career, which is why OCZ moved away from selling memory and starting hawking solid state drives, a segment that's overpriced just like DRAM used to be. It's starting to look like the DRAM market might never regain it's swagger from a decade ago, but there are still times when you should consider stocking up on memory. This might be one of them.
Elpida Memory has filed for bankruptcy protection, and according to market research firm IHS iSuppli, this move will benefit the remaining DRAM players still battling in the trenches to make a buck or two. Elpida's exit will ultimately constrict supply and push prices and revenue up in the second half of 2012.
"A meaningful reduction in Elpida’s manufacturing will cause the DRAM market to go into a state of undersupply, causing prices to increase," said Mike Howard, senior principal analyst for DRAM & memory at IHS. "Shipments likely will decrease because of the Elpida bankruptcy, even though the resulting increase in revenue—driven by higher prices—will cause the market to perform better than expected in 2012. The ultimate fate of Elpida’s manufacturing assets, which remains to be decided, will be the major factor impacting pricing and revenue growth in 2012. But one thing is certain: Elpida’s bankruptcy means the remaining DRAM players can look forward to a much rosier 2012 than they did just one week ago."
Some of the effects of Elpida's bankruptcy are already reverberating throughout the industry. According to IHS iSupply, spot prices for PC DRAM spiked 15 percent in a single day, and that's just a "preview" of what's to come later this year.
It might turn out that the DRAM market can absorb the loss of a player like Elpida, but if you don't want to risk it, now's the time to think about stocking up on memory.