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DRAM prices rise

Too early to call it a trend

Memory prices are climbing.

The spot market saw a slight price rise on Friday, and the movement has continued through today. Prior to this, the trend for the last year has been steeply downward.

The price of a 128Mb chip has leaped from around $1.20 to $1.70, and so the memory brokers have started reviewing their prices. Crucial, a subsidiary of memory giant Micron, says it hasn't moved on price yet, but UK dealer Memory Plus has raised its prices as its costs have gone up.

David Flack, marketing director of UK dealer Memory Plus, said spot prices are rising between 35 and 40 per cent. "This isn't a lot in terms of monetary value because prices are so low, but in percentage terms it's a big leap."

The company's prices on a 128Mb module have risen around £5.

"It's difficult to read the market, but it looks as though prices are on the increase," said Flack.

Crucial's spokesman was more circumspect. "There have been some changes in the spot market but it's too early to tell it's a trend."

Though it's hard to know exactly why the prices are rising, there could be some market sentiment at play following the recent Hynix bail-out/

Japanese memory makers NEC, Hitachi, Toshiba and Matsushita have complained about Hynix and Samsung selling DRAM in Japan at below cost price, and Micron is considering making a similar complaint in the US.

Also, Hynix has finally sorted out a $776 million rescue plan, which will lead to it changing the way it does business. Micron is also contemplating charging the Korean government - many of Hynix's chief creditors are part-owned by the Korean state - with aiding Hynix beyond the limits of both fiscal prudence and World Trade Organisation regulations.

Against this, market research organisation Gartner is predicting a 67 per cent fall in sales this year and a 19 per cent fall during 2002. ®

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