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Memory makers: reduce production or die

By crispin. Original by Lionel - 13/11/2008 08:55:38 CET - Category: Peripheral
We have reported many times the economic difficulties encountered by the manufacturers of memory who are confronted with an uncontrollable fall of the sales of their products.
This crisis began a few months before the release of Windows Vista. This system, greedy in memory, convinced them that there was going to be a large whiplash to the sales; thus they started to increase their production capacities. Alas for them, this bet did not pay off and the overproduction caused an unrestrained fall of their profit margins. Hoping that this crisis would not last, the largest producers continued to invest massively hoping to be more profitable in the medium-term. But the crisis that prevails now will be certainly be too much for a number of them. There seems no end in sight for this market that has already started to downsize; and this reduction will certainly not be sufficient.
According to DRAMeXchange, the specialist in this market, the only solution for them is to reduce their production capacities enormously or to die. Unfortunately, some will not be able to solve the enormous loss of money in the short term by closing production lines installed at great expense.
In this case, the price of the memory will still drop before going up abruptly if one or more of the players are obliged to close up shop.
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