The spread of the deadly Severe Acute Respiratory Syndrome (SARS) virus have caused weak demand for PC in China.

Fear of SARS have Chinese consumers avoiding retail outlets, spurring a dramatic slowdown in PC sales in the country. PC OEMs hit only about half of their April sales targets for China.

The impact of this slowdown is momentous, given that China represents the world's second largest PC market-and the only place on the globe where computer sales have been growing significantly in recent times.

Because of the slowdown in PC sales, DRAM inventory among OEMs is increasing, causing them to limit orders to memory suppliers. Meanwhile, transactions on the DRAM spot markets in Hong Kong and China have virtually ceased.

The SARS-inspired drop in PC and DRAM sales is serving to exacerbate already poor market conditions during what is historically a slow season for computer and memory purchasing activity.

Depending on how the SARS epidemic develops from here, it could impact the DRAM market even more severely. Some system manufacturers in China even are considering shutting down plants the instant they detect SARS victims among their workers, an event that would decrease memory demand and worsen market conditions for DRAM suppliers.

By: DocMemory
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