DRAM prices will rebound from the current bottom level to a level above cash-flow production cost based on 30nm process in January 2012, according to chairman and CEO Simon Chen for Taiwan-based memory module maker Adata Technology.
The rebound is mainly because cuts in DRAM output will begin to take effect, PC makers will replenish DRAM inventories and so will buyers on the spot market in January, Chen pointed out. PC makers are expected to hike inventory level from two weeks to one month, Chen noted.
Among the global top four DRAM makers, Elpida Memory has reduced production by the largest percentage while Hynix Semiconductor and Micron Technology have appropriated portions of DRAM capacity for production of NAND flash, Chen indicated. Taiwan-based makers Powerchip Technology and ProMOS Technologies have suffered the most from continual drops in DRAM prices, Chen noted.
For production of DRAM based on old processes, cash-flow production costs may be still higher than rebounded DRAM prices, Chen analyzed.
While many makers of DRAM modules have shifted business operation to other areas such as ruggedized memory, only Adata and Kingston Technology are maintaining a focus on DRAM modules, Chen indicated.
The popularity of Ultrabook PCs will reduce demand for DRAM, but total demand for DRAM will not decrease because of large potential demand for server DRAM arising from fast growth in cloud computing-based applications, Chen pointed out. However, large demand for Ultrabook PCs will take off when prices fall to US$599 and they are equipped with Microsoft Windows 8, Chen indicated.
In addition, many operators of data centers and online games, because suppliers of servers charge very high for server DRAM, have shifted to supply of much less expensive server DRAM by DRAM module makers, Chen noted.