USA: According to Converge Market Insights, as the year draws to a close, 2008 will perhaps go down as one of the worst years on record for the DRAM industry.

The lack of demand for PCs and the condition of the global economy have caused the DRAM market to reach a new low. The second half of 2008 experienced falling prices month after month. Even after output reductions and cutbacks, DRAM manufacturers were not able to recover. Losses are piling up, and drastic measures will be necessary in the coming months in order for the smaller DRAM manufacturers to survive.

Unfortunately, it will only benefit the market if a manufacturer or two were to go out of business. Anything that will help alleviate some of the supply funneling into the market will only benefit the situation in the end.

The outlook for 2009 does not appear much better. The DRAM manufacturers need to reduce production even further and to hold course on production levels as a team. There is so much excess supply accumulating in the channels that it will take a significant increase in demand from the box builders to burn through the excess inventory.

Until the economy improves, DRAM manufacturers need to understand that part of their current problem is themselves. They need a plan to reduce production and need to stick to it to truly affect the market.