Assemblers unfazed by falling DRAM prices
- 06 December, 2005 16:14
Local PC assemblers are not overly concerned with the plummeting price of DRAM components, although some have said they would hesitate to purchase the memory chips in bulk if prices declined further.
The comments follow claims from online components clearinghouse, DRAMeXchange, that a glut of product in the spot market had forced prices down to an all-time low. According to its listings, the average spot price of the mainstream memory chip had halved since the start of the year and fell 7 per cent during the past two weeks.
Corsair product manager for Altech Computers, Tex Sylatrany, predicted prices would continue to drop well into next year.
"We would try to be careful with our ordering because we don't want to get caught out," he said. "We want to have some price protection but with certain low-end models you would be taking a risk."
Sylatrany had noticed a large drop in prices with higher-end memory chipsets, but said this would not affect the pricing of its systems.
"When a purchase price drops by a dollar, it is the nature of this business that it is going to float through to the channel," he said. But Plus Corp managing director, Nigel Fernandes, disagreed.
He said PC system prices had not been slashed to reflect falling wholesale costs. Although DRAM pricing had nearly halved since the start of the year, this still only represented a drop from $70 to about $46 per unit.
"Five years ago, when you paid $200 or $300 for 256MB of RAM, it was a big cost. It represented about 25 per cent of your total system pricing," he said. "But a 10-15 per cent cut today is only $5 or $6 price drop.
"RAM is such a volatile product that when we do our system pricing, we factor in that 10-15 per cent deviation."
Fernandes said he expected prices would go down by another 10-15 per cent in the New Year.
However, Pioneer Computers managing director, Jeff Li, said cheaper DRAM was an opportunity to take advantage of profit margins.
"The demand is going down and the price had to change because there is not much happening in the memory chip market overseas, so vendors are pushing to increase turnover," he said.