Prices for DDR2 chips are expected to rise again in the second quarter mainly due to reduced production at makers, with the pricing showing more strength than the DDR3 segment, according to Jance Lu, chairperson of memory-module house Power Quotient International (PQI). Prices for DDR3 chips will remain stable until the third quarter when demand outstrips supply and boosts prices, said Lu.

The supply of DDR2 chips is likely to contract significantly starting in March, as more chipmakers switch their focuses to DDR3 output, Lu indicated. However, there will still be demand for DDR2 from the channel market though DDR3 is poised to become the mainstream soon, Lu noted.

In the third quarter, growing demand for DDR3 chips may push up the chip's average price above US$3, according to Lu. She also warned that chipmakers' aggressive ramp-ups of DDR3 memory may put them under risk of excessive supply and price erosion in the fourth quarter.

In addition, Lu expects prices for NAND flash chips to start rallying in the third quarter. The chip's mainstream density will increase to 64Gb during 2010, Lu estimated.