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DRAM price hikes expected in wake of Taiwan quakes

It may be weeks or months before OEMs know whether the devastating earthquakes that rocked Taiwan last week will severely affect the PC industry.Initial reports from Taiwan, where manufacturers produce a variety of computer technologies, such as motherboards, LCDs, notebook PCs and DRAM (dynamic RAM), indicate that component manufacturers suffered no casualties and little to no visible damage to their buildings and manufacturing equipment.
Written by Anne Knowles, Contributor

It may be weeks or months before OEMs know whether the devastating earthquakes that rocked Taiwan last week will severely affect the PC industry.

Initial reports from Taiwan, where manufacturers produce a variety of computer technologies, such as motherboards, LCDs, notebook PCs and DRAM (dynamic RAM), indicate that component manufacturers suffered no casualties and little to no visible damage to their buildings and manufacturing equipment.

They did, however, experience the loss of electrical power, which was being intermittently restored by week's end. Once the area's power grids are stabilized, manufacturers are expected to begin testing their equipment for damage. Equipment for components such as DRAM uses razor-thin calibrations whose alignments would likely have been changed once power was cut.

That loss in production time, according to observers, will most likely result in temporary increases in the price of certain components, specifically DRAM, in the coming weeks as supplies become somewhat constrained.

Already, last week DRAM was trading at $8.50 per megabyte, up from a recent $3 per megabyte, according to Mike Feibus, principal at Mercury Research Inc., in Scottsdale, Ariz., and a PC Week Corporate Partner.

"Overall there may be somewhat of a spike for two to three weeks, but it won't last too long," said Brian Matas, an analyst with IC Insights Inc., a market researcher also based in Scottsdale.

U.S. manufacturers, including Gateway Inc., Intel Corp. and Dell Computer Corp., said they were monitoring the situation in Taiwan but did not think it would significantly affect PCproduction.

Additional reporting by John G. Spooner, ZDNN

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