Component shortages lead analysts to forecast rise in prices of personal electronics
By Vlad Savov 
posted January 13th 2010 7:05AM
posted January 13th 2010 7:05AM
As you might well know, we're not the biggest fans of analyst blather, but this piece of research by Gartner is backed by some substantial numbers. The FT reports that DRAM prices have recently risen by 23 percent, followed closely by LCD prices with a 20 percent jump, both in response to the financial crisis the whole globe seems to be suffering from. Because the effects of recently renewed investment in capacity building won't be felt for a while, we're told to prepare for higher prices throughout this year -- a significant combo breaker from the previous decade's average of around 7.8 percent drops. Oh well, let's just cling to the encouraging signs for the future and ignore this bump on the road to gadget nirvana.[Thanks, Ben W]
A rise in LCD prices eh? I guess price fixing is popular again.
@YeahOK Apple's sucking up 10" panels, remember :)
What about moore's law?
@2tb
1) only applies to the number of transistors on a processor
2) isn't a law
3) has nothing to do with price or speed or anything else
"investment in capacity building"?
Production volumes of DRAMs and LCDs are down over 2008 and capacity is more than sufficient from the industry literature I've read.
Another instance of companies using "crysis", "swine flu" or other vague reasons for profit.
@weedy I'm sure Crysis was quite profitable...
@weedy make that "crisis", of course :)
@weedy
Of course people would want to upgrade their computer when they try to play Crysis.
So how much price increase is expected in terms of %age?
The manufacturers are simply attempting an artificial media-driven price rise (naughty Engadget for helping them). Will the market accept it? I'd guess that consumers are - at the moment - more price-conscious than ever; this attempt will fail and prices - with possibly a minor blip - will continue to fall.
@bostock
Really? I was think more along the lines of them raising the prices anyways and the consumer paying the price no matter what and never questioning it. Kind of like Gas/Petrol and it's slow rise back to $3 a gallon. By this summer we will be paying $3.20 per gallon and yet some how we will pay it, sure we will curse under our breathe, but really are we going to do anything about it...? Doubtful. Same here, they will raise the price, we will keep spending the money in an un-economical way, and prices will continue to be inflated until we are even more bankrupt than what we are.
@7egend
The only problem with that analogy, is that we need gas/petrol everyday. Yes, we use our electronics everyday, but we can always get by waiting a couple more months or a year from upgrading from a 24" to a 30" LCD or from 8GB to 16GB of RAM.
You may be right, but another side to that argument...
Ram chip maker are producing less than what they are use to make sure that chip prices stay at a certain level. As for LCD, I doubt the price going to increase that much for people to notice it.
DRAM has been on the rise for quite some time now, DDR2 was sold below cost and manufacturers were bleeding money until the Taiwanese government stepped in to stabilise it. DDR2 has been steadily rising, especially as DDR3 has been gaining market share (production has increased and prices are down). So this makes sense.
I don't know enough about LCD panels to disagree with the forecast but I know consumers are snapping up LCDs at this price point and have come to expect it. I don't think there will be any notable price rises and at least none that will trickle down to the consumer. I held off buying a second LCD this year despite the fantastic deals around because I don't particularly need another right now and I know December this year there will be bigger, better quality panels at cheaper prices than last year.
I work in semiconductor distribution and as far as I know the current long lead-times are caused by the global economy crisis. When the crisis hit, suppliers cut down on their manufacturing capacity by shutting down entire factories or in some cases only some production lines.
Then when the demand picked up again, they started to bring up the capacity again. Only problem is, once you fire someone, he or she won't just wait for you to hire them back again. So finding good workforce and re-establishing the production lines takes time, thus we are in a situation where suppliers can't manufacture enough parts for the gadgets.
The only thing I know for sure is the days of $40 2x2GB DDR2-800 kits are long gone. We're back up to the $80-$90 range on those, and DDR3 kits are still pushing triple digits on the cost.
They are ramping down DDR2 production, but they are not ramping up DDR3 production. Not kosher in my book.
Easy solution, nobody buy any more electronics this year. Then we can gobble them up next year half off, after the manufacturers crap their pants and the electronics industry gom't bailout is underway.
just like gas, any reason to raise prices, just succumb to Moore's law and keep that tech doubling and them prices dropping....
Guys, don't you think that this just _might_ have something to do with the devaluation of the US dollar? The US dollar doesn't buy as much foreign stuff as it used to.
Well wouldn't that lead manufactures to produce more screens with LED screens because they are more cost effective, aren't they? Also LED's are better displays anyway, I see this as a good thing if anything.
More bullshit...
"We're not making any money, people can't afford to buy our products... I know, lets put our prices up..."
How does this make sense?
Maybe the 2400 I spent on my first build (now valued around 1600) will increase back in value. It kills me that the 22 sammy, Hd/bluray, E6850, that cost 300 each, now values for 300 total. Just remember that today's tech is tomorrows trash.