The price of PCs is expected to rise in the coming months as the cost of DRAM (dynamic RAM) chips continues to rise while NAND flash memory is falling.
There's a rare shortage of DRAM in the market these days, according to DRAMeXchange Technology, a Taiwan-based company that operates an online clearinghouse for memory chips. The cause of the supply shortfall is mainly greed: too many producers have focused on higher-margin NAND flash memory, while ignoring the DRAM market. The result is there's a glut of NAND flash, which is why prices of the digital camera, USB flash drive and MP3 player memory chips are falling, and not enough DRAM.
The spot-market price of the most actively traded DRAM chips, 512M-bit double data rate 2 chips that run at 533MHz, or DDR2-533, has risen over 25 percent so far this year, to US$4.69 each, up from $3.75 at the start of the year, according to DRAMeXchange. What's worse, the Taiwanese company says prices are likely to remain strong throughout the entire first half of the year - because it will take manufacturers a while to increase production.
Higher prices for DRAM hurt users because most PC companies tend to handle the situation in one of two ways, either raising PC prices to reflect higher component costs, or reducing the amount of DRAM in each PC, which slows performance.
The situation is a little better for users buying lower-cost PCs, or anyone who wants to increase the amount of DRAM in an older PC. There's still plenty of the former mainstream DRAM chip, 256M-bit DDR that runs at 400MHz, or DDR-400, so prices haven't risen as much. The chips are up only 13 percent so far this year to $2.39, after starting at $2.11, according to DRAMeXchange.