The share of ram coming from Taiwan is immaterial.  You are not
buying Taiwanese ram, your buying non-contract or spot market ram.
Like most commodities, ram prices are set by contract.  When supply
falls below total contracts for delivery, you get huge price spikes.
According to the trade journals I read, the industry knew for months
that the 4th quarter prices were going to rise, since they know what
contracts are negotiated versus anticipated world production.  Demand was
attributed mainly do to scrambling buyers replacing Y2K non-compliant
computers with the flood of cheap boxes now on the market.  When all the
contracts can't be fulfilled due to earthquakes, supplies of excess
inventory
dry up as suppliers go to the secondary market for ram. So you have all
these users competing to buy only a fraction of the available production,
with the bulk of production committed to contracts.

You can call it greed if contract priced memory is diverted to the
secondary market to reap windfall profits.  But in the end, consumers
set the price by keeping demand up high enough to sustain the price
level.  From a supply perspective, greed is good, otherwise investment
would not occur.  From a demand perspective, how many of us were complaining
ram prices were too low when the price was below cost?  Consumer
gluttony is just as powerful a force for price correction as greed.
The answer is: prices will change.  In the meantime, I don't see any
of my suppliers absorbing the high costs of ram in their profit margins,
which must mean demand is still very high.
My advice is don't buy, or revamp your purchasing decision-making back to
1996 criteria, back to when you expected ram to be costly.  Its not that
you are being chiseled by greed, its only that your windfall has ended.
Tom Turak



I was informed that Taiwan produces much more than the 15% you have stated
here, but I do not have any solid evidence to that effect, so you could very
well be right.  However, you are also correct about the "greed" issue, and
the perceived effect can be much more powerful than the actual effect. So,
it's easier for the industry giants to justify the price leap because we
also
cannot necessarily identify where the RAM might be coming from.

As far as avoiding the purchase of RAM?  I make PCs for customers, and  I
have to put RAM in them, so that is not an option.  The only real vote that
can be taken in this arena is by the end-user.  They have to decide to hold
off on a PC purchase until after the prices drop.  That is not an easy
prospect.  I think we are all just stuck riding this one out.

Kyle


>From: Art Cassel <[log in to unmask]>
>Subject: Re: [PCBUILD] RAM
>Date: Sun, 17 Oct 1999 22:30:12 -0700
>
>One month ago, I paid $95 for a 128Meg stick of Micron 8ns Ram.  Generic
>RAM is
>now going for $229 after rebate.  This is bull!  Taiwan produces app. 15%
>of the
>RAM sold.  If 15% of the RAM sold disappears for one week (or even two),
>how is a
>200%+ price increase justified?  How about greed.  Please, just say no, and
>avoid
>buying RAM until the backup forces them to drop the price.  This is the
>same as
>if Toyota had a strike that lasted a week and General Motors raised the
>price of
>a Suburban to $85,000.
>

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