Price of PC memory up by as much as 150pc

12:15 pm - By RICHARD WOOD

Purchasers who put off buying computer memory before Christmas have come back to a rude shock finding memory chip prices have risen sharply, in some cases up 150 per cent.

A typical 256 megabyte (Mb) "SDRam module", the most common PC memory type, which was around $60 retail before Christmas, is now $150 and climbing, according to Victor Yang, general manager of component and systems wholesaler Checksun.

He said this has added around $100 to the price of a PC system. It means $200 if a PC with 512Mb of memory is required.

It is also extra for the video cards as well, as they typically have 32Mb of memory, he said.

Distributor Dove Electronics product manager Marcus van Gerwen also confirmed that memory prices have jumped.

In his estimation it is around 100 per cent, and is rising "much to the consternation of the punters who put off buying at the end of last year".

He said street prices of a 256Mb PC would be an additional $150 and said demand has already dropped for 512Mb memory upgrades.

"512Mb was a bit of a luxury for a PC, but at the low prices last year it was a good deal."

A number of global factors are causing the rapid price rises, according to TL Systems customer service manager Joshua Smith. But the major factor is the ending of a price war that has dogged the memory industry since mid 2001 and which drove prices down to an historic low in November last year. That coincided with the release of new "DDR" and "Rambus" memory chips causing dumping of older "SDRam" memory as manufacturers retooled their factories.

Industry sources further point to intense competition between Hynix, which is a part of the Korean Hyundai Group, and Micron, the world's leading supplier of memory chips.

The industry as a whole was overproducing while the IT industry slowed, and the industry had gone below economic manufacturing levels. The current price is described as only "break even" for manufacturers.

According to Mr van Gerwen, Chinese new year may also contribute to further price rises as Asian suppliers go below full production for three or four weeks.

Other factors in the memory price rises may include a general shortage of silicon wafers, and the lowering of stock levels that were held up in the US after September 11.