The price of memory has reached new lows, threatening inward investment into the UK and putting jobs at the peril. But the bright side of the equation is that stolen chips are now virtually worthless, leaving crooks with stock they can?t ship.
Sukh Rayat, general manager at Flashpoint, said: ?We?re at about $7.5 landed price for 16Mbit memory. It?s back to the same old story. There?s too much product built by suppliers and demand isn?t there.?
He said that too many factories had come online and attempts by the manufacturers to get all the prices on allocation failed last month. Prices had risen temporarily but had now slumped. ?A few weeks ago the prices doubled,? Rayat said. ?The official line is we?re still on allocation but on the spot market there?s plenty of cheap memory around.?
One problem is that Korean and Japanese fabs will have trouble shifting to other forms of semiconductor production. Although Samsung produces PA-Risc chips for Hewlett Packard, others rely on producing memory for their bread and butter. In many cases, Dram accounts for 75 per cent of Far East companies? income.
Another distributor said: ?Over the next year we?ll be in the doldrums on memory.? He warned that this was bound to affect recruitment in the UK. ?It will be tough for these guys coming into the European market,? he said.
* The traditional index of the semiconductor market will change in January. The Semiconductor Industry Association is to shift from its 'book-to-bill' indicator to an index that looks at the market worldwide. The book-to-bill index is based on American figures, which do not reflect high sales outside north and south America.
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