DRAM contract prices going up, says DRAMeXchange

DRAM contract prices have trended upward in the second half of April, data gathered by DRAMeXchange have shown. Average prices of 1GB DDR2-667 and 2GB DDR2 modules have gone up to US$9 and US$18, respectively, a 6-11% sequential gain.

The contract price of 1Gb DDR2-667 chip has also climbed to US$0.94 in the latter half of this month, compared to US$0.88 that had been kept since the second half of February, according to the data.

DRAM spot prices rose from US$0.95 averagely on April 13 to US$1.13 on April 16, as major suppliers plan to raise prices as well as limiting supply to the spot market, DRAMeXchange said. The price of mainstream DDR2 1Gb eTT chips was pushed up to US$1.2 on April 16.

Elpida Memory is likely to discontinue its shipments to the spot market, DRAMeXchange cited market sources as indicating. Meanwhile, both Powerchip Semiconductor Corporation (PSC) and module specialist Kingston Technology reportedly will also limit their shipments to the spot market until June.

The combined share of Elpida and PSC has accounted for nearly 60% of the spot market, according to DRAMeXchange. Reduced supply from the two chipmakers, as well as the world's top DRAM-module manufacturer Kingston, is expected to help lift DDR2 1Gb eTT to US$1.5 by the third quarter of 2009, said the market research firm.

Elpida was quoted by Bloomberg as saying that it is aiming to raise quotes as much as 50% and break even by June.

PSC earlier said it intended to cut back production further to reduce its cash outflow. The move is expected to help ease the present supply glut. Fellow rival Nanya Technology also plans to adjust upward the contract price of its chips by 5-10% in the latter half of April, according to the company. Nanya raised its prices by 10% in the first half of the month from the level in late December last year.

Citing the suppliers, DRAMeXchange said the 2GB modules utilizing 1Gbit parts are targeted to approach the US$20 mark, while the price of 1Gb DDR2-667 chips is able to touch US$1.06 in May or June. However, PC OEMs still claim inventory levels of 6-8 weeks, indicated the research firm, noting that most PC OEMs do not expect prices to soar in the near term due to the excessive inventory.

While foreseeing suppliers' further cutbacks will narrow the demand-supply gap, DRAMeXchange has estimated DRAM spot prices are likely to increase to a range of US$1.2-1.5, up from US$1-1.2 at present.

Source: DRAMeXchange, compiled by Digitimes, April 2009

Article translated by Jessie Shen