Contract prices for DRAM memory are set to decline further in September 2010 amid weakening demand for PCs, according to sources at Taiwan-based DRAM companies. The sources now hope PC replacement demand from the enterprise sector can pick up to help buoy DRAM prices by the end of the year.
The pessimistic outlook was given following remarks by the head of Samsung Electronics' chip division that a continued weakening of PC sales will lead to the DRAM market seeing an oversupply through the first quarter of 2011.
The fall in DRAM prices will encourage PC makers to increase memory content per PC to 4GB, but the upgrade is only limited to certain high-end models, the sources indicated. In addition, demand slowdown in Europe and the US continue to cast a shadow over the outlook for DRAM, the sources added.
On the supply side, with more DRAM producers progressing to their next-generation process technologies, the competition over die shrinking is dragging down production costs and affecting pricing, the sources noted. Samsung Electronics is now in mass production using 40nm-class process technology, which will reduce the cost for its 2Gb chips to as low as US$1.50, the sources said.
DRAM spot market prices are also trending down as retail sales remain slow, the sources indicated. spot prices for both branded and effectively tested (eTT) 1Gb DDR2 chips have fallen below the US$2 mark, while prices for same-density DDR3 parts average between US$2.20 and US$2.30.