Memory manufacturers are trying to branch out

Not a lot of money in making DRAM modules

ITS COME TO our attention that several of the big retail brand DIMM manufacturers are struggling, as memory modules just don’t have enough margins these days. Many are now trying to find ways to branch out and create other product categories, something we saw the start of last year, but it’s not easy to find a market with high margins these days.

OCZ has already announced that they’re moving over to SSDs.  They’re hoping it’ll bring in more money as the market is expected to grow exponentially for at least the next few years. However, just as with DRAM we’d expect there to be a point in time when SSD’s become commodity items with very little product differentiation. We’re also hearing that their PSU business could be doing better and for whatever reason this is a market many of their competitors are eyeing.

Corsair have apparently not done well in the past year in terms of memory sales, but on the other hand the company has managed to build a reputation for itself as a maker of quality PC cases, power supplies and even CPU coolers. The company has also done well with its sealed unit watercoolers and have recently announced a partnership with CoolIT to start selling its watercooling units under its own brand. Corsair has also gained a reputation for making solid SSD products, pun not intended, with great performance and the company introduced a range of audio products at CES this year.

The Taiwanese companies are even worse off as they’re struggling to make inroads in the SSD market which is currently led by bigger brands. Adata announced that it was going to enter the PSU business and even showed off what appeared to be retail ready products at Computex last year, but so far we haven’t seen any for sale, although there seems to be some limited availability in Europe. USB flash drives have become a dime a dozen and even the novelty kind isn’t going to make you any money these days.

Flash memory for digital cameras has gone down the same route as USB flash drives, although there’s still some money to be made out of the high-end professional products which uses fast, high-quality flash memory and of course also for industrial applications. The biggest problem most of these companies are facing is the fact that they don’t tend to manufacture the memory, be it DRAM or flash and in some cases as far as the smaller players are concerned, maybe not even the PCB that the memory modules are fitted to.

There’s no doubt that 2011 is going to be a tough time for the memory manufacturers that can’t find a profitable market to branch out into, as the memory market isn’t what it used to be and hasn’t been for quite some time. There’s only so much space in the market for high-end overclocking modules, although Intel’s Sandy Bridge platform is likely to bring with it some extra business due to the requirement of low Voltage high-speed modules for those that want to squeeze every drop of performance out of their new systems.

Looking at the DRAM memory pricing over at DRAMeXchange the price trends are down, down and down in every single category pretty much with the exception for the spot price on some older DDR and DDR2 DRAM. Even SSDs are coming down in price quite quickly, but the big drop in price isn’t expected until later this year when 2Xnm flash memory replaces the current 3Xnm products. Initially we’d expect SSD’s based on the 2Xnm flash memory to be sold at a higher price, especially paired with faster SATA 6Gbps controllers. That said, as soon as stock of older 3Xnm products start to run out, we’d expect the 2Xnm product to start dropping in price quite quickly as competition kicks in.

At the end of the day this is bad news for the companies, but great news for consumers who can purchase more affordable products. However, the danger or the current market situation is that we might see a few companies folding; especially the smaller players that don’t manage to branch out quickly enough. You can already pick up a 120/128GB SSD for as little as $200, often much less, especially in combination with various rebates. On the memory side of things 2GB of retail DDR3 1333MHz memory can be had for about $20, but of course faster memory costs more. We’re once again at a state where memory is one of the cheapest components in your system and will most likely remain so unless there’s another natural disaster or similar event until we move on DDR4.S|A

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