Makers of the PC memory DRAM are looking at less lucrative 2001 than they thought, which could mean lower prices to consumers.
According to Japanese market research company Nikkei Market Access (NMA), global demand for DRAM will increase by 50 percent in 2001, down on the 65 percent jump previously estimated.
In the last six months of 2000 the price of standard SDRAM chips has fallen by more than 70 percent from a July high of around US$9 per chip.
NMA says PC makers stockpiled chips in anticipation of a Christmas shortage, pushing the price up. Then, as companies began to use up stockpiled chips, prices came down towards the end of the year.
Making matters worse for memory makers, a downturn in the PC market (PC sales have been growing by less than expected for several years) led to less machines leaving the doors of manufacturers, and stockpiles of chips lasted longer than expected.
Also, memory put into new PCs did not increase as much as expected as box-shifters fought to keep prices down.
But NMA predicts supply and demand will move back into equilibrium, during the second half of 2001. Behind this prediction is an expectation that the amount of memory built into new PCs will increase as use of Intel's Pentium 4 processor and the Windows 2000 operating system becomes more widespread.