Why prices of RAM are sky high?

I have been buying computer parts since last 10 years or so and I have observed a trend in the prices of computer memory. The prices tend to rise up every year or so and then fall.

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But this year it has been exorbitantly high. I had bought 2gb Transcend stick for my notebook about an year before for INR 1100 that is around $20 and now the prices are almost double and reached in the range of INR 2000 to INR 2500 [$40 – $50].

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What could be the reasons?

The phasing out of technology.

There was time when I used to hunt for SDRAM for my old machine and when I found it it was way more than the DDR RAM. Then when I was looking for the DDR RAM for my second computer in the age of DDR2 RAM I had to burn a hole in my student pocket to get one. And now its happening to DDR2 RAM as more and more manufacturers are moving in favour of newer, faster, power efficient, and larger latencies. RAM will get harder to find and there will be a day when you will have to get it online only as retailers will stop ordering new stocks and just get the slowly standardized DDR3 which is either 1333 or 1066. Since these are basically more efficient and cheaper to produce than the older DDR2, more people will start buying these if their motherboards are compatible.

And one more reason by the ITNERD

German RAM manufacturer Qimonda went bankrupt. This sent RAM prices up about 26% on the spot market. Basically, the assumption is that supplies which have been beyond healthy will tighten. But ARS does point this out:

…even if Qimonda ceased production tomorrow, the DRAM supply glut is so severe that there won’t be a shortage any time soon. Presumably, the IDC report factors in the drop in PC demand, both consumer and enterprise, that the industry faces in 2009.

So in short, we the consumers are being screwed…. Again.

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