After having slid lately, contract prices for 2GB DDR3 modules are likely to be further dragged down by continued weak end-market demand, according to sources at DRAM makers. Contract quotes for mainstream DRAM modules may trend down to near US$20 by the end of 2010, driving the price of 1Gb DDR3 chips to almost US$1 close to the "break point" for Taiwan-based providers, the sources indicated.
Late October contract prices for 1Gb DDR3 chips plunged to average US$1.53, with quotes in the low range falling below the US$1.50 mark. For 2GB modules, quotes were in the US$26-27 range, down 10-15% sequentially.
Even if DDR3 contract prices drop to US$25, there is still room for price reductions, Nanya Technology has commented. The chip manufacturer said it is shipping DDR3 products quoted at US$28-30, and is concerned about another price correction in November due to sluggish demand.
Sources at memory module makers have pointed out that buying sentiment for DRAM modules tends to be conservative in the fourth quarter. However, PC OEMs are more willing to grow memory content per box in their products, the sources added.
Prices for 2Gb DDR3 chips have also fallen significantly due to suppliers' aggressive ramp-ups. The sources expect average prices for the higher-density chip to trend down to US$2 later in the fourth quarter, a level slightly higher than Nanya's and Inotera Memories' manufacturing costs.
Powerchip Technology and Rexchip Electronics, which mainly make 1Gb chips using 63nm processes, now see manufacturing costs as low as US$1.30. Rexchip is looking to migrate half of its capacity to a 45nm node, which will allow it to produce 2Gb chips at lower than US$1.50.