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Another round of memory price fixing coming?
William Henning - Thursday, April 3rd, 2008 | 10:52AM (PT)


DDR2 prices - and memory manufacturers profits - are down. Will we see another convenient shortage and rising prices?

Call me cynical if you must, but I am seeing some disturbing trends with memory.

First we have the ridiculously overpriced DDR3 being pushed onto the market - and newer chipsets are trying to force adoption by making DDR3-only motherboards.

Next, now that DDR2 is cheap and plentiful, memory makers are crying that they are losing money.

Mind you, I wonder which of the three ways of "losing money" it really is:

1) selling the chips for less than they cost to produce (to me, this is really losing money)

2) selling chips for less than desired margins (to me this is not losing money - just the free market at work)

3) not selling enough high margin DDR3 products with their ridiculous prices and crying over low DDR2 prices while trying to pay for DDR3 masks (tough cookies, don't try to force new memory!)

Only in case of (1) do I feel anything for the manufacturers.

Today I read two interesting news bits at Digitimes.

Hynix is claiming that its yields are not as good as it expected on its 66nm production lines, "only" getting 90% yields. Six months after starting production of the new 66nm parts they get 90% yields and are crying over the "lost revenue" of the spoiled 10%. FIX THE PROCESS! Find out where the fault lies, don't use it as an excuse to jack up prices - THEN - miracously and quickly fix the yields. They are still planning to migrate to 54nm later this year... oh boy, I can hear a repeat performance of "our yields are not as good as we expected, we have to raise prices" later this year.

Meanwhile, Elpida wants to replace Samsung as the #1 supplier of DRAM. Bully for them, competition is good for us consumers. What's not so good is that it plans to raise contract quotes and apparently wants to talk to its competitors about "resuming healthy pricing" - otherwise known as price fixing. Geez! What happened to healthy competition? They want to double the price of DDR2, claiming that if they don't, it will shoot to more than 5x the current price. Riiight.

 


Another round of memory price fixing coming? Image 1
Section: Memory

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Comments:

April 3rd, 2008 11:03AM(PT)
kspiess
DDR2 has been so cheap recently. 2GB's of DDR2 for like $40 and such, is just awesome to see. I'd miss those prices if they got jacked !
April 3rd, 2008 4:03PM(PT)
OmegaFury
Isn't that illegal?- fixed pricing.
April 4th, 2008 1:55AM(PT)
THM
Another money making scheme from the shrewd manufactures!!!!

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