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Monday, Dec 16, 2002

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Hike in memory prices may impact PC market

Vishwanath Kulkarni


STUNG by a hike in memory prices worldwide over the last two months, several multinational PC vendors in India have decided to pass on the hike to consumers in terms of reduced discounts, while others are keenly watching the situation.

"The hike in memory prices will definitely impact the market," said Mr K.V. Sai Chandrashekar, Country Manager, Business Desktops, HP India. "While there would not be any hike in the advertised prices of our products, we are reducing the discounts that are being offered which could vary for different configurations," he said.

Mr Alok Ohrie, Vice-President, PC division, IBM India said, "We would like to wait and watch how the market moves before deciding on any move".

According to industry sources, the upward movement in memory chip prices is a short-term trend and typically happens towards the year-end as PC makers place orders in preparation for their peak sales season.

Acer India's Marketing Manager, Mr S Rajendran, said, "Prices have stabilised for memories the last few weeks. From the first quarter onwards we expect prices of memories to dip by some 10 per cent or so. In the overall end product this would reflect by some 2 per cent to 4 per cent, if there is a sharp movement in memory prices".

The global market is also said to be witnessing a shortage in 128 MB SDRAMs (synchronous dynamic random access memory), the most widely used memory. Moreover, sources said, manufacturers of processors such as Intel and AMD are switching to DDR (double data rate) chips, which are evolutionary improvements to the SDRAMs.

DDR chips accept data twice the rate of SDRAMs and the access speed is faster. DDR chips are ideally suitable for PCs, main frame, server, multimedia graphics and other application that require a great deal of memory and/or high bandwidth.

While the MNCs are considering passing the memory cost hike to consumers, local players are said to be absorbing it as they do not operate with a standard pricing model. "The rise in memory prices will be offset by the falling prices of other components. Recently, Intel had dropped the prices of processors. We will make good with that," said Mr Mohan of Cache Technologies.

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