DRAM Chip Glut Could Lower Prices In 2003

The world is likely to be up to its hips in DRAM chips in 2003, according to a survey by Nikkei Market Access.

The prediction is likely to ruin the holidays for already-plagued manufacturers but could lead to better deals for computer buyers.

Production of DRAM chips, the survey says, will increase up to 66% as major manufacturers ramp up new production lines that pump out more chips per silicon wafer.

Even though the estimate takes into account a robust 10% increase in PC sales--and a hike in the average computer memory from 196 Mbytes to 294 Mbytes--the end of 2003 should see makers holding a two-month inventory. That could be enough to trigger a chip-price crash.

Lower chip prices could result in lower PC prices or PCs with more RAM, or both.