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DRAM Manufacturing (BACK)
The most important component used on any memory module is the DRAM chip. Thus, the quality of a memory module is directly related to its DRAM chips. Because DRAM manufacturing plants are built at a great expense (over $1 billion), a startup DRAM manufacturing facility must be able to forecast sufficiently for years in advance and sell the right product mix to turn a profit and recover the initial investment. This can be especially challenging since computer technologies advance at such an exponential rate that by the time a plant is built its product may be considered yesterday's technology. The market demand can also make business difficult for the DRAM manufacturer. If there is an over supply of product, prices may decline and cut deep into profits, making it difficult to cover standard operating expenses. Due to these factors, DRAM manufacturers are usually large well established companies or at least have strong partnerships with larger corporate entities.
DRAM Distribution (BACK)
Most DRAM is sold to companies that can purchase in quantities of 50,000 units or more based on periodic contracts. The remaining stock is sold to smaller companies through a distribution channel. Using both of these channels helps protect the DRAM manufacturers from price fluctuations, and provides economies of scale.
Large customers who buy on contract often have an over supply of DRAM. These companies sell their over supply to the broker / gray market. The brokers approach is to buy at the lowest possible price and sell for whatever the market will bear.
Demand for Memory (BACK)
There are many factors that affect the demand for memory. Perhaps the most influential factors are software application and operating system developers. As applications become more complex and feature rich (multimedia, graphical, sound, video, etc.), more powerful systems are needed to perform even the most basic functions. In addition, as computer technology changes so does the demand for more and different types of memory products. These changing expectations will continue to drive developers to create more robust applications, which will continue to require ever increasing amounts of memory. |
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