Memory: Rising prices, RDRAM on the way, and a new toyby Anand Lal Shimpi on September 13, 1999 8:27 PM EST
- Posted in
The biggest question on everyone's mind (ok, maybe no the biggest but it is definitely an important one) is "what is up with the sharp increase in RAM prices?" Although I don't have a single "it's his fault" finger pointing answer for you all, I do have quite a few sources that I managed to talk to and quite a bit of information that they provided me with. There are potentially a number of causes of this DRAM price hike we've been forced to endure and what I'd like to touch on are a few of the most likely (although not necessarily true *cough* disclaimer *cough*) reasons you have to pay over twice as much for a 128MB DIMM now than you did just a few weeks ago.
I mentioned in a front page update a while ago that most vendors and distributors I talked to pointed their fingers at one company in particular as the cause of the memory price hikes, and no, it's not Intel (they've caused other things, leave them alone this time, they didn't do anything ;)...) That company seems to be Micron, now I'm not pointing any fingers nor am I making any accusations, I'm only passing on the information that I've received from more than one generally reliable source. It seems as if Micron's semi-recent acquisition of Texas Instruments has made Micron quite the player in the US market, let's take a look at a little quote about the acquisition made back in June '98:
"This strategic acquisition will enhance Micron's position as the most cost-effective memory producer in the world, by leveraging our leading-edge technology into existing fabs without significantly increasing R&D, administrative and operating costs," said Steve Appleton, chairman, CEO and president of Micron. "The additional global capabilities, including participation in a unique joint-venture manufacturing strategy, positions Micron to take advantage of future markets."
It seemed innocent enough at the time, however there has been quite a bit of finger pointing recently. Many say that due to Micron/TI's strong presence in the US, with no reason to competitively price DRAM products due to pressure from Taiwanese/Korean makers (which would be courtesy of the tariffs placed on Taiwanese chip manufacturers), they have been simply letting the prices go up mainly because they have no reason to remain competitively priced - aka the classic monopoly theory in action. Now keep in mind, that if this is the case, it is only contributing to a portion (if any part at all) of the recent hikes. So, what else could be causing them?
With the transition to RDRAM (Rambus DRAM) being pushed for by Intel (ok, you can blame them for that, but really, they didn't do anything wrong this time) in time for their September 27th release of the Camino chipset - which will support SDRAM - memory manufacturers are currently trying to juggle more than a few balls here. Just look at what the industry is asking them to do: produce PC66 modules (seemingly not that great of a demand, but there are still PC66 compliant systems out there guys), produce PC100 modules, produce PC133 modules (just in case RDRAM fails miserably), and now produce RDRAM. That's a lot of balls they're being asked to juggle, and frankly, it makes perfect sense for them to have trouble cranking out four different flavors of memory.
A shortage of regular SDRAM modules due to the pressure for a shift to RDRAM is another possibility for such a drastic price hike, however on the other side of the issue we have the OEMs and distributors that actually sell the stuff. They are claiming the opposite, in that quite a few OEMs and distributors don't understand the price hike at all, stating that there couldn't possibly be a shortage as they are currently sitting on more than enough DRAM parts just waiting to be sold. While this doesn't apply to everyone, it could very well be a contributing factor to the rocketing prices.