Importers of memory modules have warned of price hikes of up to 25%, which will be passed on to resellers and end-user customers from today, as old stock starts to run out.
Gary Naidoo, marketing manager of the Sahara Group, says the company was "able to hold off the gradual increases we have seen over the last week, because we still had some old DDR stock. But with the new stock, the new pricing will take effect today."
Volatility again
Naidoo says volatility in memory pricing has caught the IT supply chain off guard from time to time, and says the market is still given to surges in pricing. This happens because of sporadic surges in demand from PC manufacturers in regions all over the world, resulting in under-supply from memory manufacturers.
"From our understanding, in the current situation, a large PC OEM (original equipment manufacturer) has increased its total demand, which put strain on supply." Samsung and Hynix supply Sahara with memory products.
Naidoo adds that prices may go even higher, but points out that the situation is temporary. "It should not last longer than one quarter. When there are price decreases, of course we will pass those on too."
How this hits consumers` pockets
Jason McMillan, HP product manager at Tarsus Technologies, an IT distributor and own-brand PC maker, says a 256MB memory module can cost as much as 10% of the price of a PC (about R400 distribution price). The logical inference is that the impact on even small organisations can be considerable.
"But people make it out to be more than it is. The gains of the rand in the past week probably negated [much of] the increases, meaning the impact will probably be on about 5% of the total PC price."
A PC maker like HP is supplied directly by memory manufacturers, and their buying cycle is long, which means increases will hit international brands later. Local brands are, however, affected immediately. Tarsus buys memory from Legend, a local memory manufacturer in the same group.
Naidoo says companies that are buying new systems cannot defer their purchase for a quarter. "And if you have new applications that demand better capacity, then you need to buy it right away or lose the benefits of the application," he says. "You can postpone if speed is all you need, but if you need capacity, you have to buy."
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