Memory chip shortage seen in H2 2010: DRAMeXchange
LONDON (Reuters) - Memory chips for computers are likely to be in short supply by the second half of next year as consumers demand more capacity and companies embark on a delayed drive to replace PCs, industry tracker DRAMeXchange believes.
Context & Ripple Effects
DRAMeXchange built its reputation on reading the demand side early: in December 2008 the firm called netbook SSD adoption falling below 10% for 2009, a bet against flash displacing hard drives in low-cost laptops. Its new call runs the other way — it sees conventional DRAM demand outrunning supply once two forces land together: consumers configuring machines with more memory per unit, and corporate buyers resuming a PC refresh cycle that the downturn had pushed back.
First-order effects
- If the second-half-2010 shortage materializes, PC makers face rising bill-of-materials costs on exactly the segment — commercial refresh — they are counting on for volume, while memory suppliers regain pricing leverage in 2010 contract talks.
Second-order effects
- Buyers who believe the call will pull orders forward and lock longer-term contracts, front-loading price increases into H1 2010 rather than waiting for spot markets to tighten.
Third-order effects
- A confirmed shortage would invite the classic memory-industry response: capacity expansion announcements that arrive years later and set up the next glut — the recurring structure the sector has never escaped.
The trend: PC memory is entering another round of the semiconductor capacity cycle, in which recovered demand outruns fab lead times before new capacity swings the market back to surplus.