DRam price hike causes buying spree decks

Memory Industry players make the most of DRam's price rise.

An unexpected surge in the price of DRam, which saw its value double in the past few days, has sparked off a spree of panic buying on the UK market.

Industry insiders are blaming a number of factors, ranging from alleged product shortages as a result of the Korean financial crisis, to rumours that Texas Instruments was pulling out of DRam.

Some vendors have already sold out of their existing stock of memory, not wishing to be caught with old stock in the new year. Forced cuts in memory production in Korea have apparently brought about high demand for products made in Taiwan and the US as well as Korea and Japan.

Sukh Rayat, general manager at memory distributor Flashpoint, believed the price was expected to rise, but not by the amount it has and not so soon. He said it expects it will drop again shortly.

He added that removal of standard duty rates by the European Commission on 31 December may also be the perfect opportunity for vendors to name their own prices.

Andrew MacKenzie, Datrontech director of memory business, agreed and suggested that vendors are trying to take advantage of the situation.

'People are being caught short and manufacturers are definitely milking it,' he said.

He added that prices were not expected to rise before the end of January, when Intel will announce its impending price cuts, and the Chinese New Year in February, when Asian markets tend to dump stock.

There were widespread suggestions that three Korean vendors of memory have been put on cash-with-order status by their DRam packaging suppliers.

This has had a knock-on effect causing demand for SDRam to rise and 16Mbit parts were expected to open on 12 January at a price of over $30, according to sources.

The rumour that Texas Instruments, a major player in the DRam market in Europe, was about to pull out may also have impacted the price. When confronted by one distributor, Texas Instruments would neither confirm nor deny the rumour.

The vendor was unavailable to comment.