Wednesday, January 4th 2012

DRAM Suppliers: Oligopoly The Only Way Back To Profitability?

The random access memory market is a fiercely competitive one. Also, the yearly high PC shipment volume cycles of yesteryear are now history, pushing the various memory manufacturers into the red – and staying there. Well, it seems like Elpida is feeling the pinch more than most, because much of their debt has come from the Japanese government’s recapitalization program and must be repaid by the end of April 2012. It looks like they can’t pay this off so easily and due to this pressing deadline are looking for cash wherever they can get it, so it looks like merging with one of their rivals such as Toshiba or Micron might help them out of this predicament. Ultimately though, everyone in the DRAM market is hurting now, so it looks like fewer players are needed, so that they can work more like an oligopoly to return to profitability.

While great for helping them to survive, this isn't such good news for the end customer, who will end up seeing higher prices for their memory and a much slower decline in prices, if any. There's lots of detailed analysis and facts and figures over at X-bit labs.
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9 Comments on DRAM Suppliers: Oligopoly The Only Way Back To Profitability?

#1
qubit
Overclocked quantum bit
Thanks to stefanels for the tip. :toast:
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#3
AthlonX2
HyperVtX™
so Elpida and Micron to merge?
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#4
Easy Rhino
Linux Advocate
this is hardly close to an oligoploy. this is simply market correction. prices for consumers have been too low for too long. time to separate the wheat from the chaff. capitalism FTW!
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#5
_JP_
I don't mind paying a little more. It's a bit silly, I can get a 16GB 2133MHz quad-channel kit for the same price of a 4GB 1333MHz dual-channel kit when it was introduced (three years ago, more or less).
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#6
Lazzer408
by: _JP_
I don't mind paying a little more.
:eek: SHHHHHHH!!! :slap: You may have the income to afford it but so many people don't. It's been nice to have at least ONE pc component be affordable. ;)
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#7
_JP_
Believe me, I don't.
But I'd rather do what it takes to keep all these companies afloat, keeping them with a competitor status, then let them die out, so that the ones that are left can turn their business into a monopoly. The price to pay later would be way higher, if the latter was to happen.
Hardware is affordable. You've got various price segments for every hardware part. And another advantage of knowing how to build a computer by parts is not having to buy them all in one run.
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#8
qubit
Overclocked quantum bit
by: _JP_
Believe me, I don't.
But I'd rather do what it takes to keep all these companies afloat, keeping them with a competitor status, then let them die out, so that the ones that are left can turn their business into a monopoly. The price to pay later would be way higher, if the latter was to happen.
Hardware is affordable. You've got various price segments for every hardware part. And another advantage of knowing how to build a computer by parts is not having to buy them all in one run.
Interesting viewpoint, I hadn't thought of it like that. :toast: It's effectively reducing the monopoly factor.
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#9
_JP_
by: qubit
Interesting viewpoint, I hadn't thought of it like that. :toast: It's effectively reducing the monopoly factor.
Might not be the most accurate, but it's the way I see it. For example, I would hate to have Intel buy the weakest competitors (as is common procedure) in the NAND market (and gaining share), because then you would see Intel gaining access to the DRAM market. Something that may or may not be good (I don't have to knowledge to predict that), but you all know how competitive Intel is and how they like to play the game.
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