Chip manufacturers are almost giving them away

These chips are so down, they're subterranean....

Prices in the semiconductor market have sunk so low that, if a recent study is to be believed, memory chip firms are making a loss on each one they sell.

A recent Gartner Dataquest survey has revealed that prices in comparison to production costs are at their lowest point ever.

One of the most common chips in desktop machines, a SDRAM (Synchronous Dynamic Random Access Memory) chip, has fallen 92 per cent from $18.60 to around $1.50, since July 2000.

Sarah Clements, a spokesperson with memory reseller Offtek said their turnover has slowed, but sales have increased as prices remain attractive for the consumer.

Clements added: "Margins are being squeezed. The way the market is we're all under the kosh. If we continue to sell at cost, there will be casualties."