RAM prices to increase following Japanese bankruptcy - PC Retail

RAM prices to increase following Japanese bankruptcy

The latest victim of Japanese industrial woes spells good news for RAM rivals with a welcome margin boost.
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RAM prices are set to increase following the high profile bankruptcy of Japanese DRAM manufacturer Elpida, the largest since the failure of Japanese Airlines in 2010.

Like many other Japanese manufacturers, Elpida faced a string of challenges including the high Japanese currency, natural disasters, falling demand for PC products and increased competition from rivals such as Korean memory maker Hynix.

At least some of Elpida's manufacturing facilities are expected to continue on in some form, possibly through rival acquisitions but supply chain analysts IHS iSuppli warned that even a modest reduction in Elpida's output would see DRAM prices increase.

"The ultimate fate of Elpida’s manufacturing assets, which remains to be decided, will be the major factor impacting pricing and revenue growth in 2012," said iSuppli analyst Mike Howard.

"One thing is certain: Elpida’s bankruptcy means the remaining DRAM players can look forward to a much rosier 2012 than they did just one week ago."

iSuppli was already forecasting a rise in DRAM prices up from lows of just over a US dollar per gigabit of raw DRAM chips to over $1.10 in Q4 2012. Reduced capacity due to Elpida's Bankruptcy raises that figure to $1.20, a 20 per cent increase over prices today.

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