Back in the fourth quarter of last year, the news was out that DRAM makers had already decreased production, to bring about an upturn in prices, which would allow them to turn a tidy profit with the expected increases in demand for this year.

Then in the first quarter, we started to see a leveling off of those increasing prices, and many were wondering if the manufacturers had correctly sized production, so as to keep up prices, but not have shortages cause problems further down the line, or cause spikes in DRAM price.

Maximum PC this morning tells that the production was cut too much, as there is estimated to be only a month’s supply of RAM available right now, and so we will see that price surge, and possibly begin to see delays in some manufacturers deliveries. For the smaller manufacturers of PCs, known as second tier, this is not good news. Nor is it good for those who buy sporadically, as I do, to meet customer demands which are not anywhere approaching continuous. The prices are higher, and supply is tightening considerably. Some of the vendors I use are having holes in their pricing charts, where they simply don’t have product to sell, and large end sellers, like NewEgg are showing memory holes where the notice of a due in date takes the place of a price tag.

Memory makers just can’t seem to a get a grip on supply and production and have now put themselves in a position where there’s less than one month’s worth of DRAM inventory left, says Pei-Lin Pai, a spokesperson for Nanya Technology. As a result of the chip shortage, first-tier PC makers are having a tough time getting the memory parts they need to fulfill orders.

This tighter supply has driven prices up in recent months, but even so, Pai says the majority of its PC clients haven’t dropped any orders. Nanya has already raised prices for April by 10 percent, a good tick above the industry’s average of 4-6 percent growth. DRAM pricing isn’t likely to change much more, Pai says, and already customers have begun placing orders for the third quarter.

In the grand scheme of things, this tight supply isn’t likely to have a huge impact on PC shipments, says Joanne Chien, senior analyst at DigiTimes Research. At the same time, high and rising prices could present an issue, as PC makers will have to decide how much of that cost to pass on to consumers and how much they can afford to swallow in lost profits.


Using a phrase my grandmother used to use frequently, memory supply for the near term is going to be feast or famine for a while, until the manufacturers decide once again that having a decent surplus in the supply chain is not necessarily a bad thing.

Late to the Windows 7 party  upgraders will bear the brunt of this, while those that buy their machines pre-made from the HP, Dell, or Acer folks will not feel much of the pinch. This will have the effect of making the pre-made Dell, HP, or Acer PC an even better buy for most, and those who wish to build, rather than buy, will have to be more motivated than ever.


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