Chip makers aren’t showing dynamic RAM (DRAM) much respect these days. Yet another one announced plans Thursday to stop producing DRAM and seek profit elsewhere.Taiwan’s Mosel Vitelic said it plans to develop solar cells and radio frequency identification (RFID) technology going forward, after years of producing DRAM.Over the past several years, stiff competition among makers of DRAM chips, which are mainly used in PCs to hold data as it’s being used, has caused companies to sell their products at a loss. While the low prices can benefit users by helping keep PC prices down, it also stifles innovation by forcing companies to spend less on research. In fact, new DRAM chips are now developed through industry standards groups, while chip makers have focused their energies on finding other, more profitable chips to produce.Mosel Vitelic is following its former partner, Infineon Technologies, out of the cutthroat DRAM business. The two had a joint venture DRAM factory in Taiwan. Infineon spun out its DRAM operations into a separate company, Qimonda, earlier this year. Other DRAM makers have also sought to shield themselves from the wild price swings in the DRAM market by producing other kinds of chips, such as the flash memory used to store music in digital music players, or image sensor chips for digital cameras.The culprit for the industry change has been the volatility of DRAM prices. Factors including swings in PC demand can affect prices, sending them from profitable to unprofitable in days. Over the past several years, the situation for DRAM manufacturers was exacerbated by the fact that they have often been forced to sell the chips at a loss due to overproduction. There are simply too many competitors in the industry. In the aftermath of the Internet bubble, DRAM industry revenue plunged by two-thirds in 2001, causing producers to bleed losses. They’ve been reworking their business plans ever since. Now, however, prices for the chips have started to stabilize at profitable levels. Most industry researchers, including iSuppli and DRAMeXchange Technology, expect tight chip supplies from April through June to lift prices to highly profitable levels. Part of the tightness in supplies is due to a transition to using a more advanced DRAM chip—double data rate, second generation—which recently overtook DDR as the memory chip of choice for PCs. But the main change for pricing is due to the industry consolidation and product shifts that started years ago.-Dan Nystedt, IDG News ServiceCheck out our CIO News Alerts and Tech Informer pages for more updated news coverage. Related content brandpost Sponsored by AWS in collaboration with IBM How digital twin technology is changing complex industrial processes forever As the use cases for digital twins proliferate, it is becoming clear that data-driven enterprises with a track record of innovation stand the best chance of success. By Laura McEwan Dec 05, 2023 4 mins Digital Transformation brandpost Sponsored by AWS in collaboration with IBM Why modernising applications needs to be a ‘must’ for businesses seeking growth Around one-third of enterprises are spending heavily on application modernisation and aiming for cloud native status. The implications for corporate culture, structure and priorities will be profound. By Laura McEwan Dec 05, 2023 5 mins Digital Transformation opinion 11 ways to reduce your IT costs now Reorienting IT’s budget toward future opportunities is a big reason why CIOs should review their IT portfolios with an eye toward curbing unnecessary spending and realizing maximum value from every IT investment. By Stephanie Overby Dec 05, 2023 11 mins Budget Cloud Management IT Governance news analysis SAP faces breakdown in trust over innovation plans The company’s plan to offer future innovations in S/4HANA only to subscribers of its Rise with SAP offering is alienating customers, user conference hears. By Peter Sayer Dec 05, 2023 6 mins SAP Cloud Management Innovation Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe