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Memory Market in July: Prices

We’ve probably come to some critical point: there have never been so many overclocking memory modules in the market. The prime time of PC3500 and PC3700 gone, the “mainstream” product is now 500MHz DDR (PC4000). These modules come with different timings, tested for dual-channel systems, in gold-plated, nearly diamond-inlaid heatsinks:

In fact, there’s an explanation: the industry has been lazy in unveiling any new standards, and all standard-clocked modules are already long in the market, but there’s still the urge to give something new to the client. Of course, the sales volumes of all such manufacturers are small, but the margin compensates for this to some extent, and don’t forget about the marketing effect – you cannot save on that!

The assumption that the makers have already produced all standard memory chips and are now competing with each other by reducing prices is not applicable to the memory market, though. Memory is a specific product. It is an exchange commodity and complies with the rules of the exchange jobbing with all its flying and falling prices.

The last month set out quiet, with traditionally weak summer demand and carefully controlled supply. The balance later changed into a small but steady growth of the DDR PC2100/PC2700 price. These memory types are leaving production lines and thus are becoming less widespread in the market. Meanwhile, the total DDR output in June was on the rise and totaled 200 million chips in the 256Mb equivalent.

The price for the PC3200 memory type was stable with minor deviations. Notwithstanding Intel’s launch of the new chipsets, this memory type hasn’t become a de-facto standard and cannot be considered an indicator of the price situation. It is partly due to the new Intel chipsets selling poorer than predicted. As for the true indicator, PC2100 seems to be one. It was still selling well and growing in price throughout July, although at a small rate.

However, demand for PC3200 was very high in the contract market. By the middle of the last month, all activity in the market came to a halt waiting for the new numbers for the contract prices. After a short rest, the leading world markets returned to work with an optimistic feeling about the future demand. This time it was connected to the alleged surge of users replacing older PCs.

By the end of the month the optimism somehow subsided. The surplus of chips sold out and the necessary monthly financial results achieved, they allowed the prices to drop down a little. This correction was not enough to compensate for the growth during the first half of the month. Overall, we ended July with slightly higher memory prices: from $4 to $4.5 for 256Mb. Judging by all, August is going to present a similar picture: there’s no factor that can dramatically affect the demand growth.

 
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