The Domino Effect

Discussion in 'World Events' started by kmguru, Aug 9, 2001.

  1. kmguru Staff Member

    The Domino Effect

    ZDNet News

    Memory makers hit rock bottom

    The computer memory industry, notorious for roller-coaster swings between bust and boom cycles, has never been this low--and hopes for a quick rebound are fading.
    Prices have sunk to the point where memory manufacturers are selling their chips for well below cost and are unable to cut costs deeply enough to squeeze out a profit, despite repeated rounds of layoffs. Hopes for a quick end to the carnage have faded since memory makers have reported several weak quarters. That's good news for consumers, who can add memory for a fraction of last year's prices, but disastrous for manufacturers.

    To illustrate the extent of the plunge, take a look at pricing for 128-megabit synchronous dynamic random access memory (SDRAM) chips, the most common type of memory used in PCs. A year ago, SDRAM chips averaged $18.40 each. Now, the same chip sells for about $1.50 on the spot market. On average, prices on DRAM decline by about 32 percent per year, according to Dataquest.

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