The recent price hikes of 25% and more associated with memory modules are justified, in the light of new technological developments and changes in manufacturing techniques, according to Rectron CEO Mark Lu.
Lu says many industry watchers have been expecting the hikes and have made plans accordingly.
"While vendors such as Dell and HP have foreseen the swing in the market, their actions in overstocking on DRAM memory products have exacerbated market shortages and spiked prices on the DRAM spot market," he says.
"This has impacted negatively on manufacturers, vendors and resellers who did not make the necessary arrangements."
Lu maintains that changes from 0.13 micron to 0.11 micron circuit sizes (nearly 1 000 times thinner than a human hair) in the manufacturing process of microprocessors is one of the causes of market shortages and consequent memory product price rises.
In addition, he says certain manufacturers are shifting their focus to inexpensive flash memory, which has worsened the DRAM supply position.
Commenting on this, Lu says it is quite normal for vendors to begin with low output volumes when introducing new technologies and then ramp up production as soon as they are confident that the process is stable.
He maintains that high prices will be the norm in this sector of the market until the supply of DRAM returns to normal, probably about mid-year.
"All industry watchers are hoping for this to materialise as the Olympic Games, which starts in August, will spark increased PC, laptop, PDA and new technology cellphone and handheld device sales - putting the DRAM producers under even greater pressure to boost their output volumes," he adds.
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