Chip prices rise

Tuesday, 11 December, 2001

With a general chip drought, and higher than expected demand, chip prices are rising in the PC processor sector, leading to hopes of a recovery.

Supplies of Intel and Advanced Micro Devices chips are limited according to analysts and computer dealers, and Pentium III and Pentium 4 chips for servers are difficult to find, while there are also difficulties in obtaining some of the less expensive Pentium 4 desktop chips.

Memory companies are also seeing an upswing. A 512 MB module of DDR DRAM now sells for $246, according to Roland Baker, chief executive of Net Express. At the beginning of November, it sold for $157.

While shortages are usually bad news for chip companies, currently it means companies can clear out inventories and do not have to resort as quickly to price cuts.

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