Prices rise in memory channel: supply tight

DDR memory prices climbed steadily in June and July but while demand has been strong, major vendors say they are still able to fulfil their customers' orders.

Prices on lower capacity (128Mbit) DDR266 Mhz and DDR 333 Mhz memory increased up to 25 per cent in the past three weeks, Memory distributor Simms International sales and marketing director, Gavin Troxler, said.

Higher capacity devices including DDR 266/333 and 400 had increased by 12 to 14 per cent over the same period, he said.

Memory vendor Kingmax’s pricing across all modules had leapt up roughly 15 per cent last week, Barsley said.

“Prices had been rising slowly but in the last two to three weeks there’s been a dramatic rise,” he said.

A 256 DDR 333 module, which cost about $150 ex-tax in December, fell to about $50-$55 a month ago, but was now about $75, he said.

The price rises would only have become more obvious over the past two weeks, due to the sudden fall of the Australian dollar according to Legend Australasia’s senior manager, Bradley Dowe.

The dollar’s rise for most of the past two months had “dampened out the hand-on of those prices to the channel”, he said.

“Prices have been rising for eight straight weeks now,” Dowe said.

Legend had seen chip prices rise nearly 66 per cent over that time, he claimed.

The price crunch on the DDR 333 was fuelled by high demand, in part due to the phasing out of DDR266, Barsley said. Kingmax had stopped selling DDR266months ago.

The high demand and subsequent increased prices for the DDR 333, combined with the low worldwide demand for the newer DDR400MHz, meant that the averge selling price 333MHz was higher than that of DDR256Mb 400MHz, he said.

While there were no obvious drivers for the increased demand for memory over the past couple of months, Kingston Technology country sales manager, Keith Hamilton, said the major driver appeared to be cyclical.

“There was a lot of uncertainty with the markets – China was a big consumer, but with SARS, there was a bit of a lull and the market lost a bit of momentum. But China is back on track, and everybody is ramping up,” he said.

Memory vendors including Kingston Technologies, Legend and Kingmax reported that their local DDR memory supplies were adequate, although Kingmax national sales and marketing manager, Ken Barsley, said USB flash memory drives were also in scarce supply.

USB flash drives had become a huge market in the past 3 to 4 months, Barsley said.

“It’s very hard to get stock – we can sell as much as we can get," he said. "Kingmax had ramped up from its initial 1500 unit shipment to about 3,500 units a week.

“If we had the stock, we could sell at least 4,000 pieces a week, minimum."