Memory packaging and testing companies are now facing price-cutting pressure from some upstream chipmakers, which expect to maintain profitability amid DRAM price drops, according to industry sources. Contract prices for DRAM packaging and testing are likely drop by 5-10% sequentially in the fourth quarter, the sources estimated.
For certain DRAM packaging, the backend firms are requested to cut their quotes by as much as 10-20% in the fourth quarter, the sources said.
The sources commented that growing demand from the consumer electronics sector is still having little impact on the overall DRAM industry, as products such as Apple's iPhone and iPad devices require far less memory compared with desktops and notebooks. A pickup in PC replacement demand is still regarded as a key contributing factor to buoy DRAM prices, the sources indicated.
However, the sources now expect DRAM prices to trend downward gradually through the fourth quarter of 2010, as demand from the PC sector remains weaker than expected.