Path: utzoo!mnetor!uunet!lll-winken!lll-lcc!ames!mailrus!tut.cis.ohio-state.edu!rutgers!iuvax!pur-ee!uiucdcs!uiucdcsp!gillies
From: gillies@uiucdcsp.cs.uiuc.edu
Newsgroups: comp.sys.mac
Subject: Re: Apple memory upgrade backlog
Message-ID: <76000153@uiucdcsp>
Date: 17 Mar 88 18:42:00 GMT
References: <793@entropy.ms.washington.edu>
Lines: 16
Nf-ID: #R:entropy.ms.washington.edu:793:uiucdcsp:76000153:000:891
Nf-From: uiucdcsp.cs.uiuc.edu!gillies    Mar 17 12:42:00 1988


An AP article yesterday in our local newspaper tried to explain the
skyrocketing memory prices.  The Japanese are voluntarily restraining
production to raise the price of chips.  Only TI an Micron Technology
still make large DRAMs in the U.S.  The article asserts that:

1.  TI an Micron are simply absorbing windfall profits in the U.S.
    I think Motorola has finally decided to re-enter the market.
2.  The Japanese are absorbing windfall profits in Japan, and will
    probably plough the money back into R & D.
3.  The shortage resembles the Japanese automobile voluntary
    restraints.  It's likely the japanese will move into high-end
    chips (CPUs?), as they did with cars.

I think DRAM technology is inelastic, like petroleum.  It takes years
for the market to react to a steep rise in prices, because maverick
competitors must invent new high-density chip designs to compete.