DRam prices sink to new depths

UK memory distributors are facing tough times as the global market prices of DRam have slumped to their lowest level this year.

Memory prices have tumbled from about #80 per 16Mb DRam module at the beginning of the year to just #19 last week. European and UK distributors are finding themselves lumbered with memory they bought in at expensive spot prices, but have to sell off cheaply and in high volumes in order to maintain their turnover.

The debacle is being blamed on the massive oversupply of DRam modules by the giant South East Asia manufacturers and on the emergence of Taiwanese companies on the DRam scene, pushing supply beyond demand. The financial crisis in South Korea, which has been lent $100 billion by the IMF, is also considered a source of future instability in the DRam sector.

The introduction of synchronous Dram (SDRam) is forcing down prices of established DRam modules.

Sukh Rayat, general manager of memory distributor Flashpoint, commented: 'What we have now is simply more of what happened six months ago, but on a deeper level. In order to make up the shortfall we have had to increase the volumes sold.'

He also condemned the anti-dumping tariffs put in place in the UK by the Department of Trade and Industry and the EU as a waste of time. 'What were they for and what did they do? Nobody policed the procedures or ensured that the policy was enforced,' he said.

Andrew MacKenzie, director of Datrontech Group's memory business, agreed that tariffs have made little difference. '1998 is going to be one of the toughest years for the memory market,' he said.

He added that most vendors were moving over to SDRam modules quickly.

'Some motherboard manufacturers are designing with SDRam only in mind now, forsaking EDO DRam altogether,' he said.