PC memory prices soar.

A confusing mix of facts and rumors is causing a steep hike in memory chip prices, bringing some needed relief to beleaguered manufacturers but threatening to put the brakes on falling PC prices. Memory prices have surged 50 percent and more in various markets in the last week amid a swirl of rumors that the supply is beginning to shrink. The price of 64-megabit memory chips has jumped to as high as $14 from $8 in spot markets, sources said. In May, the same chips were selling for $6.70, a record low. Although the price hike is real, its cause is tough to pin down. Production problems at some manufacturers and cutbacks in memory module manufacturing are rumored to be the cause, according to some sources. Other possible, more factual, contributing factors: a nationwide electricity grid blackout in Taiwan earlier this summer that caused plant shut-downs, a transition to higher-capacity chips, and increased demand because of higher-than-expected PC sales.