DRAM Makers Suffer Due to Lackluster Vista Adoption


Nina DiBoy

Memory chipmakers to lose money, Vista demand over forecasted

Memory chipmakers brace for tough quarter due to falling prices of DRAM
chips, expanded factory output, and over forecasted Vista demand, which
cause some manufacturers to sell their chips below the production cost,
analyst said.

The average spot prices for mainstream DRAM have tumbled 65%. This is
the steepest price decline of DRAM this decade, Gartner said.

The DRAM industry, whose demand relies on PCs and Internet-server
systems, is expected to drop 11.1 percent revenue in 2007, according to
Richard Gordon, research vice president at Gartner.

Another research firm, iSuppli, said that based on its calculations DRAM
sector is expected to post a weighted negative operating margin of 19%
in the second quarter.

The DRAM market’s woes were caused by sluggish PC shipments and the
rising number of factories built last year and coming online this year
to produce the memory chip.

In-Stat, says the demand for new PCs has not been impacted significantly
by Vista’s delay and subsequent release.

“With the recent release of Vista, a short-term rise in PC demand is
anticipated,” says Ian Lao, In-Stat analyst. “System sales that had been
muted waiting for systems pre-loaded with Vista rather than XP are
expected to work through sales channels in the next two quarters.
However, these sales represent an offset from last year rather than
actual new demand creation.”

Vista demand is suppose to fuel DRAM chips market as PCs shipped with a
premium version of Vista are expected to come with 1GB of RAM in the
form of two 512MB sticks. On the other hand, users of those PCs shipped
with 512MB are expected to be looking to upgrade/replace their memory.

Analysts expect some DRAM makers to swing back to profitability later
this year, when PC sales are usually stronger in the back-to-school and
holiday buying seasons. Vista migration rate is also expected to pick up
in 2008.

Valve Survey Shows Few Gamers Switching to Vista

About a week ago, Valve began a new survey for users of their Steam
service. They've kindly put up a constantly-updating results page open
to the public, and the answers provide some interesting information on
PC gamers' habits. The info we've garnered is based off current results
for the survey as of 2:30 PST, with a bit over 380,000 users surveyed.

A tendency towards higher numbers for lower technology is shown, as
might be expected, although it's surprising to see 72% of those
answering have less than 1GB of RAM. Nevertheless, reaffirming the Xbox
Live mantra that communication is important in online gaming, 76% say
they have microphones hooked up to their PC. Also, Intel is just barely
inches ahead of the nearly perfect 50/50 split with AMD for processor
space in Steam users' computers.

About 55% of those surveyed use NVIDIA video cards. Only 32% use ATI,
although Valve and ATI likely expect this number to go up some with the
recently-announced deal between the two giving ATI Radeon users free
access to a couple of Steam products.

Perhaps most interesting is the data on operating systems. A whopping
93% still use Windows XP, with only 5% having made the jump to Vista. Of
that already small number, only 1.24% of total users have DirectX10
capabilities enabled on their Vista PC. It's still very early in the
Vista lifespan, but, apparently, gamers aren't jumping on the DX10
bandwagon all that quickly.

Remember, this is just a snap photo of the results from the survey
currently. They're continuing to be updated by Valve as more surveys
come in, so if something flip flops, we'll let you know.

Priceless quotes in m.p.w.vista.general group:

Most recent idiotic quote added to KICK (Klassic Idiotic Caption Kooks):
"Spoken like a true NixTurd (oops, NixTard)."

"Good poets borrow; great poets steal."
- T. S. Eliot

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