DRam market begins to return to stability

Memory market finds own feet before EU anti-dumping tariffs on Far East product begin to bite

The memory market has finally started to stabilise, with prices beginning to rise, one month after the EU reimposed anti-dumping tariffs on Far East DRam.

Reference prices, which impose tariffs of up to 60 per cent, were brought back by the EU, 21 months after they were suspended, to prevent Japanese and Korean DRam makers selling product at less than cost price in Europe (PC Dealer, 19 March).

The tariffs were originally called for in an attempt to stabilise the chip market after DRam prices fell by over 80 per cent during 1996. Many felt the tariffs were unnecessary, because moves by chip vendors to restrict volumes had already begun to stabilise DRam prices.

Samsung cut its monthly 16-Mbit DRam output from 18 million units in February to 16 million in March.

But the EU?s decision has brought criticism from the channel and the government in the UK. Ed Bateman, product manager at Ideal Hardware, said: ?Prices crashed last year, putting many of the European fabs in jeopardy, so something had to be done to protect investments. But as production is slowing down, prices are starting to rise again.?

His comments echoed the sentiments of the Department of Trade & Industry, which felt the EU was wrong to impose the tariffs. ?We were happy to see the tariffs go. The DRam market is prone to fluctuations and we do not see any need for such tariffs at the moment,? said a DTI representative.

One of the surprise victims of the tariffs is the chip broker industry. Grey market importers have found themselves hit with the same overheads as vendors.

Sukh Rayat, general manager of chip distributor Flashpoint, said it was helping to clean up the DRam channel. ?This is good news for the channel and for the customer,? he said.