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Micron boss predicts end to memory price slump

Micron boss predicts end to memory price slump

Micron's president Mark Adams claims that the DRAM price slump is ending, meaning now is a good time to buy memory.

If you're looking to buy memory, now might be a good time: according to industry experts, the DRAM market's ongoing slide has reached its nadir.

Speaking at the company's regular analysts' day, memory specialist Micron Technology's Brian Shirley admitted that the last quarter has seen DRAM pricing drop by around 20 per cent as part of a year-long dip in global demand for PC and laptop memory.

Slowing demand for desktop memory has led to an oversupply that is driving down prices. It's easy to see: prices for mainstream products like DDR3 have never been cheaper. While that's good news for the consumer, it's not so good for the DRAM makers. After a bumper 2010, last year was a shocking disappointment which has left the majority of manufacturers facing severe losses. Only Samsung, which commands consumer electronics profits alongside semiconductor income, managed to turn a profit.

Micron's president Mark Adams is confident that the market is turning a corner, however. Speaking to Businessweek ahead of the meeting with analysts, Adams claimed that the bottom of the curve has been reached. 'I don't think DRAM [pricing] goes down from here,' claimed Adams. 'It's starting to feel like a stable market.'

The announcement comes just a few days after the company announced that it is to target laptop and smartphone markets with a new DDR3 design featuring low standby power. Dubbed DDR3Lm and available in 2Gb and 4Gb chips, Micron's new product promises desktop-like performance from battery-friendly modules.

The news that the slump could be over is a good one for memory makers. It's also likely to be helped by increased supplies of hard drives as manufacturers restart facilities in flood-hit Thailand, believed one of the biggest contributing factors to the drop in demand for DRAM. Looking at the short-term picture, however, it's not such good news for consumers. With wholesale memory prices stabilising and likely to rise, retail prices will doubtless follow in due course.

As a result, our advice is simple: if you're looking to snag a memory upgrade for your current rig or a future build, you'd do well to buy sooner rather than later.

8 Comments

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bulldogjeff 13th February 2012, 12:16 Quote
It never was going to last for ever, which is a shame. But compared to 2 years ago when I paid £180 for 6Gb of GSkill Trident a slight rise really won't be a total killer. We've just been spoiled a bit lately.
SubtleOne 13th February 2012, 15:13 Quote
Bear in mind, this is shortly after Micron's previous CEO was killed in a plane accident. It is fairly expected for the new replacement to put the shareholders at ease.
pizan 13th February 2012, 15:19 Quote
Oh so is the memory industry going to collude to keep prices high...again?
MjFrosty 13th February 2012, 15:21 Quote
"Christ the CEO is dead, quick, new fella...jump up and say something reassuring"
Waynio 13th February 2012, 15:55 Quote
I remember very well how much ddr3 were a while ago, painfully expensive compared to how they are now, they've come close to being the cheapest component in a system now if I get chance I'll buy an 8gb set while they are so affordable.

Don't want to be like :'( again like I were about HDD's. :D
talladega 13th February 2012, 17:03 Quote
He didn't seem to say the price would go up either. Just that it would stabilize, so the prices may stay the same?
Adnoctum 14th February 2012, 04:43 Quote
So there is no self-interest here by promoting a fear that memory prices may rise against increasing demand? Or in reassuring investors that Micron stock is a good bet to buy/hold?
He would say reassuring things in order to boost the stock market confidence in Micron, whatever he thought would happen to DRAM prices.

He is talking to a business audience that doesn't care about maintaining affordable memory prices or reassuring consumers. He is speaking to investors who want to see stock price rises, and the main way that will happen is increased company profits. How? Well, he said it in the article:
Quote:
Originally Posted by BW Article
The industry is inching closer to Appleton’s vision of a more stable business populated by few producers, Adams said...The company now has more than $2 billion in cash reserves and in a market with more stable chip prices, Micron may use its balance sheet to lead more consolidation, he said.

Fewer producers = less competition = less consumer (manufacturers or retail) choice = less competitive pressure to reduce prices = higher DRAM prices.

Micron's strategy to profitability is to reduce their competition, not in reducing production costs through production process research or efficiencies. The final part of the article was a rumored Micron stake in DRAM competitor Elpida.
NethLyn 20th April 2012, 13:06 Quote
It's Micron, I can't remember a time they were ever cheap under their own name when making memory for Dell etc though of course you get what you pay for and Crucial's their good value side so they're not all bad.

I was tempted to get the RAM for any future new build separately or, now I have 7, to use it in this one and recycle the old sticks later - normally in April we'd have cheap HDDs but the floods took care of that, RAM would be the next best thing to get a bargain with.
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