DRAM Prices Continue to Trend Downward

[Guest]

The already fragile DRAM market continued to lose ground in the second half of October.

DRAM Prices Continue to Trend Downward : Read more

 

[vaughn2k]

That is good news for me, and not for them...

 

[chewy1963]

Here's hoping the industry as a whole doesn't over-correct. One well placed tsunami could cut the supply to the point we'd be scrambling for memory. My advice? Buy all the DRAM you can now!

 

[abbadon_34]

Looks like it time to go the RAM drive, how does 32 system 32 drive sound?

Answer: A whole of fun and gluttonous space, just like the yesteryears's 1000W+ PSU's

 

[guardianangel42]

[citation][nom]chewy1963[/nom]Here's hoping the industry as a whole doesn't over-correct. One well placed tsunami could cut the supply to the point we'd be scrambling for memory. My advice? Buy all the DRAM you can now![/citation]

Never thought I'd see survivalist policy advocated with respect to PC hardware.

@The Article,

This is likely to continue regardless. With Windows 8 being more efficient with memory than Windows 7 and hardware's seemingly inexorable march toward more performance slowing, RAM purchases are bound to decline.

Until such time as we devise something to do with our computers that takes less power than hardware we have now can muster, this trend will only get worse.

Because I said so.

 

[RealJames]

Thanks Toms for posting an article that doesn't mention apple or idevices at all... what a breath of fresh air!

 

[Robert Pankiw]

I hope this isn't a stupid question, but why would they sell below cost? Is it because no one is buying and they'd rather sell at a loss than not at all, or is it just that competitive? Not to sound like I am encouraging collusion, but why not simply refuse to sell below cost, there are still many millions of computers sold world wide each year, and every one needs RAM, so why agree to sell below cost?

 

[vaughn2k]

[citation][nom]Robert Pankiw[/nom]I hope this isn't a stupid question, but why would they sell below cost? Is it because no one is buying and they'd rather sell at a loss than not at all, or is it just that competitive? Not to sound like I am encouraging collusion, but why not simply refuse to sell below cost, there are still many millions of computers sold world wide each year, and every one needs RAM, so why agree to sell below cost?[/citation]
It is all about business and wastes.
Have you ever heard about LEAN manufacturing? Waiting is waste, over production is waste, inventory is waste.
These companies rather sell their inventories in a very low prices (even less than assembly cost) rather than keep the inventories and loose more in the long run.

 

[monkeymonk]

Hmm seems like they were depending on windows 8 doing more to increase demand than it did

 

[greghome]

Hopefully, the decline in demand won't send most DRAM companies to bankruptcy or stop manufacturing RAM

 

[techcurious]

[citation][nom]Robert Pankiw[/nom]Not to sound like I am encouraging collusion, but why not simply refuse to sell below cost?[/citation]
Although the idea seems simple enough, it is not. If a manufacturer (lets call it MEM1) decides to do this, they will only be helping their competitors who will be continuing to sell at the new higher prices thanks to the drop in supply that MEM1 created, while MEM1 takes in heavier losses thanks to the reasons explained by vaughn2k. And if MEM1 could convince all the other manufacturers to withhold shipments for a short period so they could all enjoy a rise in prices, they will all get dragged into court for conspiring to artificially inflate prices. Even if the new prices would be barely higher than production costs, I believe it would still be considered artificially inflated prices (someone correct me if I'm wrong..).
The only way they could get out of this is for them to agree to actually close down factories to reduce output by all of them, or wait it out till the weakest manufacturers finally cave and drop out of the market (thus increasing demand for the remaining players), or dream about a substantial increase in demand.

 

[AM2A]

[citation][nom]Robert Pankiw[/nom]I hope this isn't a stupid question, but why would they sell below cost? Is it because no one is buying and they'd rather sell at a loss than not at all, or is it just that competitive...[/citation]
Fixed costs (unavoidable) are included the cost of manufactured goods. If they stop producing and selling anything they still have to cover fixed costs, but no longer have any revenue to cover it. Depending on the specific amounts, you can lose more by halting production than continuing. It's not sustainable in the long run, however.

 

[zanny]

[citation][nom]chewy1963[/nom]Here's hoping the industry as a whole doesn't over-correct. One well placed tsunami could cut the supply to the point we'd be scrambling for memory. My advice? Buy all the DRAM you can now![/citation]

Unlike hard drive makers, DRAM is made outside of one city-state. It would take some major coastal devastation in east Asia to wipe out capacitor makers.

DDR4 will hit market in a year anyway, so they have room to fall still.

 

[ojas]

I don't get it, even mobile devices use DRAM, so why continue to blame the "weak" PC demand?

 

[tomfreak]

[citation][nom]chewy1963[/nom]Here's hoping the industry as a whole doesn't over-correct. One well placed tsunami could cut the supply to the point we'd be scrambling for memory. My advice? Buy all the DRAM you can now![/citation]u must be kidding me. buy now? there is still room to fall. How about this, the sec i heard news about some natural disaster kills some DRAM factory = rush out and buy?

 

[Cryio]

You know, I hate you guys living where you live. You have cheap GPUs, CPUs, RAM, phones, SSD, etc etc.

I'm poorer than you and here prices are at least 50% higher.

Good 4 GB DDR3 1333 ram still costs me around 30 bucks.

 

[Thomas Creel]

Hope the memory biz picks itself up by the boot straps. Don't want to see any manufactorers go, the variety is one of my favorite things about choosing memory.

 

[CaedenV]

[citation][nom]Cryio[/nom]You know, I hate you guys living where you live. You have cheap GPUs, CPUs, RAM, phones, SSD, etc etc. I'm poorer than you and here prices are at least 50% higher.Good 4 GB DDR3 1333 ram still costs me around 30 bucks.[/citation]
thats a lot more than 50%. Out here you can get 8GB for $40 or less. Don't hate us for it though, we are generally nice people

 

[CrArC]

[citation][nom]ojas[/nom]I don't get it, even mobile devices use DRAM, so why continue to blame the "weak" PC demand?[/citation] Mobile devices use one (maybe, at a push, two) chips per unit. Computers use 16, 32 or more. Mobile devices don't really make up the numbers in current quantities.

 

[pedro_mann]

[citation][nom]Cryio[/nom]You know, I hate you guys living where you live. You have cheap GPUs, CPUs, RAM, phones, SSD, etc etc. I'm poorer than you and here prices are at least 50% higher.Good 4 GB DDR3 1333 ram still costs me around 30 bucks.[/citation]
Go to school, move? Or just be content.

 

[pedro_mann]

[citation][nom]chewy1963[/nom]Here's hoping the industry as a whole doesn't over-correct. One well placed tsunami could cut the supply to the point we'd be scrambling for memory. My advice? Buy all the DRAM you can now![/citation]
Yeah, will they make ddr3 to ddr4 adapters then?

 

[hapkido]

[citation][nom]Cryio[/nom]You know, I hate you guys living where you live. You have cheap GPUs, CPUs, RAM, phones, SSD, etc etc. I'm poorer than you and here prices are at least 50% higher.Good 4 GB DDR3 1333 ram still costs me around 30 bucks.[/citation]

I don't know where you live, but the higher cost is likely due to import costs for the seller (both taxes and shipping) and VAT for the consumer.

 

[tbq]

[citation][nom]Robert Pankiw[/nom]I hope this isn't a stupid question, but why would they sell below cost? Is it because no one is buying and they'd rather sell at a loss than not at all, or is it just that competitive? Not to sound like I am encouraging collusion, but why not simply refuse to sell below cost, there are still many millions of computers sold world wide each year, and every one needs RAM, so why agree to sell below cost?[/citation]

Technically you can sell "below cost" without losing money, at least in the short term. The total cost of manufacturing an item includes materials, labor, factory overhead, and various other costs such as R&D and marketing. The costs that are considered variable include mostly materials and labor, essentially any cost that would not incur if that item was not produced. A fixed cost is any expense that a factory would have regardless of them producing anything or not such as the mortgage on the factory/equipment, insurance, non-production worker salaries, R&D, marketing, etc with a tiny portion of each being assigned to every item that comes off of the assembly line. An item that costs $1 to manufacture may include 50¢ in materials, labor, and other variable costs, with the rest being fixed costs. As long as the factory can sell their items for more than the 50¢ in this example they're losing money from an accounting perspective, but they're really not losing money and would end up losing more if they didn't produce anything.

This is how companies like AMD manage to report multi-million dollar losses for several consecutive quarters without running out of money.

 

[jonjonjon]

you can use all your fancy economic terms but its says production costs. isnt that how much it costs them to make the memory? that would be materials and labor not r&d and advertising. if their selling it cheaper then they can make it they wont be in business for long. especially when it looks like prices will continue to fall. if they cant sell it for more then they make it for then they should shut down the factory until they sell what they have or demand picks up. doesnt seem like a good situation for these company.