If you're explaining, you're losing - JC Watt
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Memory firms flog three for two offers
WHILE THE PRICE of DDR2 is dropping fast, DRAM makers have started bundling it with DDR3 modules.
DDR3 chip prices are rising so the memory firms are flogging two for three deals in a bid to clean out their inventories.
Any day now the point where shipments of DDR3 exceed DDR2 will happen and, as DDR3 supply to the spot market is severely tight, DDR2 is sitting around doing nothing.
According to Digitimes, it seems that the DRAM makers have followed the supermarket chains and intend to bundle DDR3 modules with DDR2 ones, to avoid a widening price gap between the two memory standards.
The idea is to minimise the impact of combined DDR2 oversupply and DDR3 shortages. Already some downstream channel distributors have also started to bundle in a move to promote DDR2 memory.
According to DRAMexchange, spot market prices for 1300MHz 1Gb DDR3 chips averaged $3.08 on January 18 compared to $3.01 on January 8. The average price for 800MHz 1Gb DDR2 has gone down below $2.50. The prices of DDR3 chips are now more than 25 per cent higher than DDR2. µ
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The problem is just that there aren't many who need much more RAM than 3 years ago. DDR3 can be produced in 4GB DIMM versions now, but seriously, if you aren't a professional illustrator, hardcore computer user or work in a datacenter, you just don't give a shit.
The problem is not only that we don't need it, we can't use more because hard drives are still a too big bottleneck for using say 16GB in Photoshop and hitting 'save as' every 5 minutes.
And then again - find an application which actually needs that much memory you use daily in your life.
That the DDR2 prices go down is nice for the embedded world, where DDR3 isn't there yet, but DDR2 just in the make and hardware companies are experimenting with the hardware for a future where embedded will be much more important than today.
Before christmas, the manufacturers cut back supply in order to jack up prices. This succeeded.
Of course, with higher prices, fewer people are buying. So youve got higher prices, but reduced supply *and* demand which (I hope at least some economists can agree) is liable to lead to lower profit. And this is what we find.
What the manufacturers need to do to get people buying again is to reduce prices. Bundling wont help; how many people want DDR3 for their Shiny! New! rig and a free upgrade for their old DDR2 box before they flog it on eBay? Some, sure. But not many.
So they are eventually going to have to increase supply. I know that. You know that. They know that, really, but theyre pretending they dont, because they *like* higher prices and the entirely illusory (but easy to understand) benefits that they bring.
How many times are we going to go round this depressing, pointless cycle before they get a clue and stop trying to control the market?
Imagine a boot stomping on an obsolete DRAM chip - forever.