There's too much DRAM out there

[DaBees-Knees]

http://www.theinquirer.net/inquirer/news/1561363/there-dram

THERE'S MORE THAN ENOUGH DRAM production in the world and manufacturers should not look at building any more capacity until 2012, according to the bean counters at Isuppli.

The IT industry analyst firm says that after engaging in a massive capital spending program during the middle of the decade, the worldwide DRAM industry now has sufficient manufacturing capacity to last through 2012.

Mike Howard, senior DRAM analyst for Isuppli said that DRAM makers spent $50 billion on new chipmaking gear and fabs from 2005 to 2007, equaling 55 per cent of total industry revenues.

This was an unprecedented boom in capital spending leading to a 125 per cent increase in wafer capacity and a 349 per cent increase in bit output. This in turn has led to a painful oversupply situation that caused prices to drop. It has proven really dumb, according to Isuppli, because since early 2007, DRAM companies have made a combined operating loss of nearly $16 billion.

So it's a buyers market.