Memory Prices Have a Déjà Vu Drop

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When it comes to the price of PC memory, let's try to remember 2005. That was a fine year for folks who wanted to boost the power of their computers, and not such a good year for companies that make the chips. Now it appears this year might be shaping up the same way.

So get your cash ready, because prices on random access memory are falling quickly. RAM chips temporarily store a computer's work, which disappears when a computer is turned off, unlike the hard drives that store data more lastingly. Adding memory boosts computing headroom, translating into programs opening faster and windows switching more quickly. RAM also makes up a significant chunk of a new PC's cost.

Last year was hugely profitable for memory-chip makers. Yes, wholesale prices on their chips continued to fall, but only about 10 percent for the year, according to iSuppli, a market research firm. In 2005, chip prices plunged 40 percent, iSuppli says. That deeply slashed profits at Samsung, Micron, and other memory makers.

For end users, at least from my experience, a gigabyte of RAM still costs about the same, or even a bit more, than it did a year ago.

But a slide has started that iSuppli is predicting could drive memory prices down more than 30 percent. That should make it a great year for consumers. For the manufacturers? Well, it may not be that bad. They've seen volatile RAM prices before, and many have arranged to shift to the flash memory used in thumb drives and elsewhere, although flash prices are also falling. By autumn, however, memory prices may stabilize as demand picks up again. For now, it looks as if consumers can enjoy a replay of 2005.