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DRAM buyers advised to go shopping

Computer users in the market for DRAM are well-advised to go shopping, according to analysts measuring the recent freefall of memory prices.

Computer users in the market for Dynamic RAM chips are well-advised to go shopping, according to analysts measuring the recent freefall of memory prices.

Samsung Electronics followed NEC and Hitachi today in announcing that it would cut production in an attempt to halt the decline. The price for Samsung's 4MB DRAM chips has fallen to $7 this month from $12 in December.

"This is a good time to buy because chip prices have definitely hit the bottom," said Jim Handy, an analyst at market research firm Dataquest.

Other analysts, however, expect prices to drop even lower.

"Right now is a fairly good time to buy if you want to upgrade in the next six months, but we're forecasting additional declines in the next year," said Linley Gwennap, editor in chief of Microprocessor Report, a newsletter in Sebastopol, California.

Gwennap said the companies are unlikely to cut production much more because further reductions could negatively affect chip demand. "I wouldn't expect too many companies to cut back too far because they will be unable to supply as demand picks up later this year," Gwennap said.

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Memory chip prices take a dive