Early November contract prices for 1Gb DRAM memory have plunged by over 7%, driving the price of 2GB DDR3 modules to US$24-25. Suppliers will see further price falls through the second half of December, but expect any decline to be more moderate.
The continued fall in DRAM prices reflects the fact that demand is too slow to keep up with chipmakers' output growth using advanced processes. The mainstream memory densities for PCs still remain 2GB, limiting overall DRAM consumption.
Elpida Memory's and Powerchip Technology's production cutbacks have had an insignificant influence on the current supply-demand imbalance, as output at other fellow DRAM makers using their most advanced process technologies is growing at a faster pace. Samsung Electronics is ramping up its output using 30nm-class technology, while Inotera Memories is set to complete the conversion to 50nm by the end of this year.
Samsung's production costs are now far lower than those offered by Taiwan's DRAM producers, implying that a return to price stability is unlikely to take place in the near term unless the market leader decides to scale down its production or actual end-market demand booms.
Nanya Technology said it expects to see more PC clients raise memory content per box in their products to 4GB in the first quarter of 2011.
The general market consensus is that 4GB modules should become the mainstream in the market after the second quarter of 2011, when prices for 2Gb chips reach US$1.50-2.