Taiwan-based DRAM chipmakers have notified their PC clients to be prepared for a possible 50% reduction in their output after July, due to issues relating to upstream material supplies, according to industry sources.
If interruptions in the supply of blank wafers and other materials persist for a prolonged period of time, Taiwan's DRAM producers will have to cut back their production significantly starting in July, the sources indicated.
In addition, PC OEMs have become more aggressive in building up inventory amid concerns that the main raw materials used to make DRAM may see constrained supply due to the impact of Japan's recent earthquake and subsequent tsunami, the sources observed.
Fears of supply chain disruptions in Japan have given DRAM makers stronger bargaining power over PC OEMs in negotiations about contract prices, the sources pointed out. Contract prices for the second half of March have received a boost, the sources added.
Meanwhile, industry leader Samsung Electronics has decided to raise prices for its DRAM sold to PC vendors, joining fellow companies that had already adjusted their prices, the sources said. Samsung's move will help lift contract prices for April and the next few months, the sources believe.