DRAM producers could end up being caught in a price trap following the precipitous fall in memory prices this year, making it almost impossible to charge more than the bare minimum for devices.
Andrew Norwood, senior analyst for Gartner Dataquest, says that Microsoft's launch of Windows XP last month will do little to help the plight of troubled DRAM vendors, and that its memory requirements are below the minimum now shipped as standard in PCs.
"256Mbyte may be enough for any PC," he said. "At the moment, it costs $30 and this is a problem. We know [DRAM makers] are selling at a loss. They really need to triple pricing. If PC companies are thinking about shipping PCs with 512Mbyte, that will take the memory cost up to $180.
"There is a ceiling here and DRAM companies have to face up to that or the PC companies will restrict the amount of memory they ship. You can ship a PC with half the memory but you can't ship with half a processor. The problem is XP runs quite happily on 128Mbyte."
Even if XP was more memory-hungry, Norwood says it is unlikely that November's launch will lead to a sudden jump in memory demand.