Memory-chips and the Value Curve

The WSJ article Micron Chief Dies in Crash, mainly discusses the death of Micron CEO Steven Appleton in a plane crash; however, it also talks about the struggling micro-chip industry. Micron is the last remaining American semi-conductor company. Many of the current Japanese competitors are considering pulling out of the market, and consolidations are likely. The reason for the industry troubles can be seen in the simple value curve shown below.



The article states that with lower demand for computers, computer manufacturers are looking for lower prices. In addition, consumers always want the newest, and best thing. Memory-chips haven't had a drastic improvement in many years. A large reason for this is that research is very expensive in the industry, especially for such price sensitive products. While the chips' performance and reliability are always improving, consumers always want more.