Robust mobile device demand continues to encourage DRAM suppliers to allocate more capacity to produce mobile DRAM chips resulting in a substantial decrease in their production for PCs, according to industry sources. The drop in commodity DRAM production has therefore caused a shortfall in supply, and buoyed the chip prices.

Major DRAM firms including Samsung Electronics, SK Hynix and Elpida Memory already allocated more of their available capacities for the production of products for smartphones and tablets, while reducing the output of PC DRAM chips, the sources said.

Contract prices for DRAM chips have risen more than 50% since the beginning of 2013, the sources indicated. Prices went up almost 20% in March alone, the sources added.

Due to a shrinking PC market, second-tier DRAM chipmakers have shifted their focus to non-PC memory products, including mobile DRAMs and server-use chips. Some have even decided to gradually phase out from the DRAM market, causing a tighter supply situation, the sources observed.

In other news, Rexchip Electronics' 12-inch wafer fab located in central Taiwan was hit by a 6.5-magnitude earthquake struck locally on March 4, with some quartz furnace tubes damaged. Several thousands of wafers have been affected. In response, Rexchip said that the damage is small and will not affect its shipments to customers.