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Memory Price Skyrockets!

by Mark H. Anbinder & Adam C. Engst

Elephants beware! The price of memory is shooting up! This is largely due to a tariff levied on Korean-imported memory chips, such as from Hyundai and Samsung. The US Commerce Department just ruled in favor of US memory manufacturer Micron Technology's complaint that the South Korean manufacturers were selling chips for less than it cost to make them. Samsung and others have posted a bond to continue importing chips, reportedly at the same price as before the ruling. As a result of the ruling, Japanese chip prices are going up as distributors bid more and promise quicker payments for materials to build SIMMs.

What this means for users is that SIMM prices will rise and supply will become tight. As with hard drives and other components, major manufacturers like Apple tend to get "first dibs" on parts used in building their computers, so other vendors may be left with the scraps. End-user prices on computers are unlikely to rise as an immediate result of this shortage, especially since Apple buys memory from many different sources around the world, but prices that might have come down in the near future probably won't.

Memory industry insiders are estimating that this backlog, and resulting price increases, will last anywhere from several weeks to several months, with a common estimate of about four months. Chances are fairly good that, for at least the next few weeks, prices will increase steadily. Paul McGraw of APS feels prices will rise quickly, level off for a while, and then gradually descend to perhaps $30/MB, although probably not as far as the $25/MB range of last week. MacWEEK quoted Mike Frost, president of TechWorks, as saying " This could create a shortage like back in 1988 when prices shot through the roof. The savvy corporate buyer will buy supplies now to cover the next several months."

This situation may serve to shake out some of the cut-rate memory vendors, who will be unable to retain customer loyalty as their prices increase dramatically and delays mount. One possible result is that, even when things settle down, the final memory prices may be substantially higher than they are now. This will be due only partly to the increased taxes, and partly to a reduction in competition. Although it may already be too late, don't put off investigating RAM prices if you're thinking about buying memory in the next few months.

Information from:
Paul McGraw, APS vice-president

Related articles:
MacWEEK -- 26-Oct-92, Vol. 6, #38, pg. 1