Shortages force up memory prices

Memory prices are set to spiral after a recent series of product shortages and legal battles have plagued the industry.

Memory prices are set to spiral after a recent series of product shortages and legal battles have plagued the industry.

Shortages stem from a number of vendors who have shifted production to more profitable flash memory sticks, used in digital cameras and MP3 players, slowing down production of traditional PC memory.

A court ruling earlier this year in favour of memory designer Rambus over vendors Sega and Hitachi is also likely to lead to extra licensing costs. Rambus will be able to demand royalty payments from any company manufacturing a DRam-based memory module.

Prices in December are expected to triple those in January, said David Flack, marketing manager for distributor Memory Plus. "In January, we sold 128Mb of SDRam for £61. Now we sell it for £91 and by the end of the year we expect it to cost over £150," he said. Memory had been expected to stabilise at £100.

"At this time of year the big vendors such as Dell and Compaq take their full memory allocations to build up extra stocks in time for Christmas, which puts us under further stress," added Flack.

Daniel Hiscocks, sales manager at distributor Dane Elec, said vendors had warned them four months ago about availability problems. He cited the increased popularity of flash memory as a cause of shortages. "I think it may be September next year before prices start to fall again," he said.

Meanwhile, Rambus has announced a 1Ghz chip. The 1,066Mhz RDRam module provides 2.1Gbps of bandwidth per device and can support up to four devices - a 33 per cent increase in performance on the 800Mhz module that was the company's mainstay. Samsung, Hyundai, Toshiba, NEC and Infineon have announced plans to develop chips based on the new architecture.