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Price of DRAM Continues to Drop Rapidly
Posted on Nov 29 2011 08:51 AM by xper in Hardware

Due to slow season, oversupply of dynamic random access memory (DRAM) and shortages of hard disk drives (HDDs) pricing of computer memory continues to decrease. The contract price of 4GB DDR3 memory module in the second half of November was down to $17.5 (-7.9%), whereas the price of 2GB DDR3 module was $9.5 (-7.3%).

According to DRAMeXchange, a research division of TrendForce, due to the weak demand for PC in November (some PC OEMs orders were even cancelled) the market remained slow. Affected by the inventory pressure, several DRAM manufacturers resorted to cutting prices. In addition, the DDR3 2GB spot price dipped 25% compared to last month, which gave the clients an edge in the contract price negotiation and in turn furthered the price drop.

Although DRAM makers such as Elpida and Nanya reduced their capacities in November, the effect of downsizing will not kick in until Q1 2012. In the short term, the DRAM market will still be in a state of oversupply, with the contract price downturn most likely to continue through the end of 2011.

The contract price of DDR3 2GB dropped from $18.75 in May 2011 to the current average selling price (ASP) of $9.5, a 50% decrease; the spot price of DDR3 2GB plunged by 70% to $0.74.

With price falling below the manufacturing costs of many DRAM makers, companies with weaker financial health have downsized their capacities or shifted their focuses to other sectors.

Full story: xbitlabs

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