May 21, 2007

The Memory Market

April has come and gone without any hope of a turnaround in the memory market. The only good news is 512M DDR2 UDIMMs only dropped $4-5 over a 30 day period as opposed to the $10-12 drops seen throughout the month of March. Current spot pricing for major 512Ms is in the $19-21 range. Tough to call that good news but we are trying to be optimistic. Unfortunately, 1 GIG DDR2 UDIMMs continued a hefty slide and are currently available in the $36-38 range. That’s a $10-12 drop from the end of March.

We get asked almost every week where is the bottom. And the fact the same question gets asked repeatedly in markets like this means nobody has the answer. It takes a significant spot market buy from a major box builder to indicate we have hit bottom. Until that happens, the free fall will continue. Judging by today’s current spot prices, the amount each density (512M and 1GIG) will drop going forward should be less and less. The DRAM manufacturers are running out of money to give back.

We’ve all been in markets like this before. It’s frustrating and unavoidable but it doesn’t last forever, it just feels that way.

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