Want to know why memory prices are so high? I talked to Crucial, Kingston, and Mushkin about it today...

KDOG

Diamond Member
Oct 9, 1999
5,525
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They responded to my inquiries on what their reasoning is on the current price issue and I put them in an article for my at my site, here.

All I got to say about what they told me is --> :(


Can I get a linky from AT? Thanks if Anand decides to...
 

bacillus

Lifer
Jan 6, 2001
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another factor that's often quoted is the arrival of XP & its higher memory requirements!
 

Pabster

Lifer
Apr 15, 2001
16,986
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Perhaps the XP extravaganza, yes, but mainly the reduced production and the fact that Intel has went DDR for the P4.

I see prices continuing to rise.
 

KDOG

Diamond Member
Oct 9, 1999
5,525
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I see prices continuing to rise.

Pabster is correct. In the article, you'll see that they actually believe they were selling for far to cheap, so... there you have it.
 

Idontcare

Elite Member
Oct 10, 1999
21,110
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91


<< And whoever said they're selling the RAM at a close margain... is talking s**t >>



Yeah, that's why they make fistfulls of dollars man, those dram makers are so filthy rich...LOL!!!!!!!!!!
 

johndoe52

Senior member
Aug 12, 2001
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Glad I bought my ram a couple months ago. 512 in my school computer and 256 in my other computer should be just fine for a while.
 

KDOG

Diamond Member
Oct 9, 1999
5,525
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I have 384MB of PC2100 in mine, I guess that'll have to do for a while. Another 128MB prolly wouldn't kill me though...
 

John

Moderator Emeritus<br>Elite Member
Oct 9, 1999
33,944
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DDR prices are up thanks to Intel. Memory prices as a whole are up up up since consolidation in the industry and idle productions lines are on the upswing. NEC shut down a memory plant. Toshiba has given up on making memory modules and sold out its US plants to Micron. I see it continuing to rise for quite some time. I remember paying 150.00 for 128MB PC133 a few years ago!
 

AGodspeed

Diamond Member
Jul 26, 2001
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Can I get a linky from AT? Thanks if Anand decides to...

I think you mean a "sticky" KDOG.

Oh yeah, I'm happy I got a 256MB PC2100 stick in my back pocket from last Fall. :) Sorry for the others that didn't jump on the bargains. :(
 

Wolfdog

Member
Aug 25, 2001
187
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The price was never going to stay as low as it has for long. The memory market is consolidating. With micron bidding for the hynix operation. Toshiba looking to exit. Memory fabs are also closing, staggering production, etc. The price of that stick of memory gives people thier salary, pays for production equipment, r&d, etc. The memory companies are greedy to boot. While it would be nice for a sustained low memory price, it does have its dark, black side.
 

Omer

Senior member
Jun 20, 2001
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I think it's true that prices will probably not return to the old dirt cheap levels.

But that's actually a good thing since if these guys don't make any money, and they were losing $$ @ the old prices, then we won't see any advances or overall improvements, etc ...

Personally I think prices will come down about 25-40% and stabalize.

These memory makers are not Opec ! Once production ramps up and margins improve they will cut prices to gain market share and so on.

just today Mwave dropped their price on 512 MB DDR from $138 to $130 ... so hopefully that's a good trend.
 

LukFilm

Diamond Member
Oct 11, 1999
6,128
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<< Remember all those people who told you to buy as much as you can now back when memory was cheap? Well they were right. >>



<---- glad he bought 256MB DDR from Crucial for $25 last Fall :D
 

Soccerman

Elite Member
Oct 9, 1999
6,378
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well they DO have to pay for the R&D costs for any UPCOMING types of RAM.. even now the prices aren't terrible.. I can buy a stick of 256 meg PC2100 RAM for ~$100 Canadian. things used to be so bad that the same RAM (if available) would cost ~300 Canadian.
 

LuNoTiCK

Diamond Member
Jan 7, 2001
4,698
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How much does it actually cost the memory makers to make the ram? People say they were selling it below cost and all, than whats that point of selling it. I want to know how much it really costs them to make it.
 

Epsil0n00

Golden Member
Aug 29, 2001
1,187
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[bragging]
hmmm, glad I bought in at the last second and got my 1GB of DDR 2100 for $130. Now it is double the price.
[/bragging]

I long for the days of cheap RAM. :(
 

Dug

Diamond Member
Jun 6, 2000
3,469
6
81
:frown: I was going to get 256 from Crucial for my laptop a little over a week ago and it was $55.
Today its $90

That's not right.
 

Idontcare

Elite Member
Oct 10, 1999
21,110
63
91


<< How much does it actually cost the memory makers to make the ram? People say they were selling it below cost and all, than whats that point of selling it. I want to know how much it really costs them to make it. >>



OK, lets make some assumptions about a hypothetical company and see what it costs to stay in business (break even without including R&D overhead or pre-acquired debt): Assume the total initial fab investment depreciates in 36 months (gets you through 2 tech nodes before needing a retooling for 3rd gen technology node)

Initial Fab investment: $2,000,000,000
Depreciation/month: $55,555,555.56/month depreciation
1500 Employees: $ 7,500,000.00/month salary
Consumables: $ 2,000,000.00/month (wafers, chemicals, filters, etc.)


Total cost of operation: $65,055,555.56/month


Now, assume the following conditions (albeit exceptionally favorable) for the fab production statistics:

200mm Wafer capacity: 50,000/month
Die size: 50mm^2
Die Yield: 95%

Total Good Chips: 30,875,000/month


Now the break-even cost will simply be the cost of operation divided by the total good die produced each month:


Total cost of operation $65,055,555.56/month
-------------------------------- = ------------------------------------ = $2.11/chip for break-even
Total Good Die 30,875,000 chips/month


So we see even for a hypothetical company that has no debt, no R&D cost, no capex (i.e. it just has to make the money back initially invested in a fab plus pay for itself to keep people employed) with exceptionally favorable die size and yields it still must sell each chip for more than $2 to just break even.

Now compare that to your 8 chips/stick (or worse 16!) of memory and you see why selling 128MB of ram for ~$25 means someone is loosing money (remember resellers eat too, sad but true...) Larger capacity sticks of ram such as 256 or 512 MB of course consume more chips or must be larger in area meaning fewer overall chips/month produced.

Does that help? Hope so :)

- Phil
 

bendixG15

Diamond Member
Mar 9, 2001
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I gotta admit.. I believe every damn word that is printed here..
..every word..it just has to be true....
 

DefRef

Diamond Member
Nov 9, 2000
4,041
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I AM SOOOOOOOOOO GAWDDAMN SICK AND TIRED OF THE F*CKING WHINING BY YOU 12-YEAR-OLD NIMRODS WHO DON'T KNOW SH*T ABOUT BUSINESS OR ECONOMICS!!!:|:|:|

Memory is going for about 26-41 CENTS per MB and you twerps are howling like they just told you there's no Santa Claus! In 1995, RAM...not DDR, not PC133 or PC100, but plain old pre-EDO RAM was 40 DOLLARS per meg!!! In 7 years, prices are now 1/100th of what they were, for faster stuff, but the babies are filling their diapers because it's not 1/200th the price, like it was a few months back. Pathetic!:|

I'm a relative newbie to computers, having gotten my first PC only 5 years ago. I bought 64MB of EDO for $320 ($5/MB) and that was great cuz it wasn't $40/MB. Over the years, as I've upgraded PCs, mobos, CPUs and become more a gearhead, I've paid $180 for a 128MB stick of PC100 ($1.41/MB); $105 for 128MB of PC133 (82 cents/MB); $90 for 256MB PC133 (35 cents/MB) and finally, $35 for 256MB PC2100 DDR (13.6 cents/MB, after MIR, it'll be 9.7 cents/MB!) In only half a decade, it's possible to get SIXTEEN TIMES as much RAM for less than a THIRD of the cost.

Does anyone remember when RAM spiked something fierce in late-2000 due to demand and the Taiwan earthquakes? I had just bought at $105 for 128MB when it soared to $300 for that same stick. "Whew!", I thought, "Good thing I stocked up." Yeah, I was happy until 4-6 months later when the priced fell back and then kept falling until I got the 256MB for $90 deal. Of course, then it fell again to ~$35 for that same 256MB stick of PC133. [bangs head on desk], but I caught the DDR deal at Beast Buy last month before this spike. (Wonder how far it'll fall this time, now that I've stocked up?;))

Yeah, it sucks that prices have jumped up, BUT you can cry me a river and not get a shred of symapthy from me because IT'S NOT THAT BAD NOW!!! When the P2-300 came out, the CPU ALONE was $1800:Q, now the top-o-duh-line Athlon 2000+ is sub-$300. Anyone priced CD-RWs lately? 24X burners are less than half the price of 12X burners a year ago and paying more than $100 for one these days will get you laughed at around here. Hard drives have gone from $230 for a 5.1GB WD in early 1998 to $130 for a 60GB/7200RPM Maxtor - a drop from ~$45/GB to ~$2.20/GB! Hell, I saw a Sony laptop at Costco with a 1GHz Athlon CPU/14" TFT screen/20GB HD/256MB RAM/combo DVD-CD-RW drive/FireWire/USB etc. for $1400! You couldn't get a DESKTOP for that power/price point 18 months ago, now you can carry it cuz it's less than 7 pounds!

Ya getting the drift as to why I'm not sympathetic to the crybabies here yet?

If you kiddies are lucky and you get a economics teacher who isn't totally Bolshevik (look it up), you may learn about SUPPLY AND DEMAND and you may learn that it's nothing personal against you when prices go up. It's also not EVIL for a company to make a profit - One day, you may get a job that doesn't involve asking, "Ya want to Super Size that?", and will be concerned if the place you're working for can afford to keep your butt on the payroll. Ask your folks if they're worried that they may have to cancel your pr0n pipe cuz the $50 a month is more than unemployment will cover. Better yet, ask you GRANDparents about the Great Depression and then try to get some pity because it costs as much to buy 256MB of RAM as you willing spent your allowance on THPS2 or GTA3 for your PS2. (Hint: They'll hit you with their cane, so DUCK!)

20 years ago, gasoline was $1.50/gal. Now, it's hard to pay more than $1.10 around town (Detroit). What else is 35% LESS than it was two decades ago? But, when gas was getting close to $2/gal. last summer, hoo boy!!! Someone investigate why Dubya's oil buddies are screwing us!!! Yeah....six months later....it's yawn city.

So, next time you want to holler that you're getting screwed cuz ECON101 principles are crimping your relatively inexpensive lifestyle, refer back to this post and then smack yourself for being a greedy, spoiled brat. (Then STFU!)

/rant
 

Marrkks

Senior member
Jun 9, 2001
309
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0
Now that was a rant!

and a damn fine one at that.!.

all very true. ***looks around "computer table" and realizes paid more for the parts outside the case than the parts inside the case***(outside=K6 proc, 2gig hd,15gig, pc133ram, ect.)(inside=1600xp,30gig hd,256DDR ect.)
 

KDOG

Diamond Member
Oct 9, 1999
5,525
14
81
Good grief!!! Never thought a little old article of mine would stir up so much emotion!!! ;)