Market panics over vendor supply cuts

Price is no obstacle for punters as fear of DRam shortages send them running to their nearest vendor

Prices of DRam shot up by 50 per cent in a 48-hour period as panic buying hit the memory market last week.

Sukh Rayat, MD of distributor Flashpoint, said it was because 'four or five manufacturers decided to limit supply'.

This led to record sales last Thursday, Rayat said. 'We sold 20,000 Simms that day.' And prices are likely to stay high too.

Rayat said the 1 x 32 Simm is the most popular item, followed by the 2 x 32 and the 4 x 32. 'The 1 x 32 price had gone down to #30, but this morning (Monday) we are selling it at #45,' he said.

The company's observations were echoed by a number of other distributors including Dane Elec and Ideal Hardware.

Alan Stanley, Dane Elec managing director, said: 'There is definitely panic buying. The Koreans have been slashing product and recently put the price up, but people still bought it. So they put the price up a bit more.' Rayat thought that the rises were primarily due to market re-adjustment. 'On a quarter-by-quarter basis, DRam has fallen by half,' he said.

Ideal Hardware also saw major fluctuations in the market. According to James Wickes, the company's managing director, prices had risen rapidly which would give rise eventually to price stability.

The news was predictable. It is a classic strategem of DRam manufacturers to over-produce, cut prices, and then put a clamp on semiconductors to limit supply and force prices to go sky high.