D-Ram Surplus -> Shortage

[paydirt]

There was an overabundance of D-Ram manufacturing capacity, causing Qimonda to go out of business and others to cut back on production by 50%. There are huge stockpiles of D-Ram driving the price down, but once those stockpiles are gone, there may not be enough supply to keep up with demand. Is anyone thinking of buying a bunch of D-Ram to simply hold onto and sell later?

 

[taltamir]

when a company goes under, they don't set their stock on fire for kicks. They auction it to the lowest bidder to help cover their debts (part of the bankrupcy procedure), which means a bunch of comapnies and people are getting qimoda ram for a fraction of its worth and can sell it for even CHEAPER than before.

That being said, when it runs out the other companies now have one less competitor to worry about.

 

[Idontcare]

To have a shortage in dram we must go thru a mammoth growth in global demand so much so that it consumes the existing idled fab capacity. Only then will you see prices pop as supply becomes constrained.

Right now fabs are running around 30% capacity. That means from the moment forecasters see customers putting in contracts for more dram chips they can ramp production and triple the supply in a matter of about 30 days.

And even if demand could more than triple and outstrip supply then you'd have all the other folks out there jumping in to dump their inventories which they had bought today with the same thought in mind as the OP's.

It's not a bad idea, its just not unique enough to avoid the thousands of folks who will try and cash in on the same cycle so the peak will be ever more muted, sapping the profits (if any) from such a play.

 

[Blain]

Originally posted by: taltamir
when a company goes under, they don't set their stock on fire for kicks.
They auction it to the lowest bidder to help cover their debts (part of the bankrupcy procedure)

I assumed an auction was to get the highest bids possible.

 

[paydirt]

thanks for the capacity %s, Idontcare. I think I will hold off on the DRAM speculation then 🙂