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DIRECT PC VENDOR Dell lost an amazing $30 million in its financial first quarter because it got caught out by an unexpected rise in the price of DRAM chips.
In a statement it said its profits weren't as high as expected because of the soaring price of DRAMs in April, suggesting the firm is walking something of a component tightrope.
Memory analyst Andrew Norwood from Dataquest Gartner had predicted through these pages last October that a memory meltdown was ahead, and warned that changes in the market would disrupt vendors' businesses.
He said then that "pricing will increase or else the industry and its vendors will collapse".
Many OEMs buy when the price of DRAM is low and store chip modules until the time is right, but it seems that perhaps Dell doesn't think in the long term.
Although Dell said its revenues had risen in its financial first quarter by 22% to $11.54 billion year on year, QonQ, and net profit was a not insignificant $731 million, that extra $30 million is not to be sniffed at.
Source:
The INQ!
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