Buyers can expect short-term price increases for some components in the second quarter. Demand for electronic end equipment is usually weak in the first quarter, but demand should increase in the second quarter, which means increased component consumption.

Buyers responding to PURCHASING Magazine's monthly price survey say they expect 64 Mb and 128 Mb DRAM tags to move up over the next 90 days. SRAM tags may also rise. An increase in memory prices should not surprise anyone. Prices fell drastically last year and consolidation and production cutbacks followed. High inventory levels are gone and any increase in component demand will likely cause prices to bump up temporarily.

However, price increases should not be drastic or long lasting. There would have to be a significant increase in end equipment demand for component prices to rise dramatically. While end equipment demand is expected to be better than last year, growth will be slow. Much of the growth in end equipment demand will be in the second half of the year, according to analysts. That means component demand is not likely to pick up seriously until then and prices will be generally soft although pricing for some components, such as DRAMS, may be volatile.