Industry plays down DRam rise

Price rises could be due to channel restocking and speculative buying

The recent rise in DRam memory prices may not have anything to do with an increase in demand for PCs, according to industry watchers and players.

DRam prices, which started to rise steadily in June, are expected to continue to rise throughout July, but observers have claimed the reasons for this could be a mix of restocking in the channel and speculative buying.

Market watcher DRAMeXchange claimed original equipment manufacturers see the spot price surge as nothing more than channel restocking with no real PC demand behind it.

Chris Austwick, managing director of vendor VTEC, said: "As far as I can see there is no real demand behind the price rise. There is some profiteering going on and it means there is a lot less product in the channel.

"If this happened at peak times the prices would have jumped by 30 to 40 per cent, but because we are in the slack summer season, prices have risen slowly."

DRAMeXchange claimed European traders are looking to stock up on DDR333 and, to a lesser extent, DDR400 memory types, which marks the move from DDR266 to higher-performance DRam.

Stefanie Summerfield, general manager at DRam vendor Crucial Europe, said PC2700 (DDR 333) is the top-selling memory in the system builder arena.

She added that DDR333 and DDR400 sales make up 30 per cent and 15 per cent of total double data rate (DDR) sales for Crucial, but they are expected to overtake sales of DDR266 this year.

Market watchers such as VLSI and iSuppli warned severe shortages could happen later in the year. But at the moment Austwick believes the shortages are deliberate.

"The price of DDR DRam has risen by £2 in two weeks. If there was a real shortage it would have jumped by £10 or more by now," he said.