A-Data predicts DRAM shortages

January 7, 2010 | 14:16

Tags: #credit-crunch #dram

Companies: #a-data #elpida

Memory manufacturer A-Data is sounding a warning over limited DRAM supply throughout this year, with demand expected to exceed supply significantly.

As reported over on DigiTimes, the warning comes after many manufacturers slowed down production as a result of the global credit crunch out of fears that the market would become saturated - potentially leaving manufacturers with large quantities of unsold stock devaluing in a warehouse somewhere.

This sort of tactic is a perfectly valid method of limiting liability and reducing costs during a difficult financial period, but can be a dangerous balancing act: make too much of a product, and the market will become saturated; make too little, and demand will exceed supply - exactly what A-Data predicts for this year.

This is good news from the perspective of a DRAM manufacturer: increased demand is indicative that the tech sector is finally climbing its way out of the financial doldrums it has languished in since the credit crunch began.

The comments from A-Data's Simon Chen echo those made late last year by rival manufacturer Elpida's Yukio Sakamoto, who also predicted DRAM supply issues for this year. While the lowered output of most major DRAM manufacturers could well prove a headache for OEMs dependent on large quantities of RAM, consumers shouldn't worry: Chen has stated that he believes DRAM prices "will not rise sharply" despite its increasing scarcity.

A-Data itself has little to worry about from a DRAM scarcity perspective: last year the company enjoyed a 20.1 percent increase in revenue year-on-year, bringing in NT$34.84 billion (£684 million) - revenue which the company plans to use in expanding to developing nations, with offices due to spring up in India and China. An increase in demand - to the point of exceeding supply - will only help drive that revenue still further, and hopefully convince manufacturers that it's time to ramp up production once more.

Are you happy that the market seems to be recovering, or do you think that manufacturers need to hurry up and increase their production in order to avoid unnecessary price hikes and shortages? Share your thoughts over in the forums.
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