Contract prices for 2GB DDR3 modules, which once soared to a peak of US$46.50 in the first half of 2010, have now dropped below US$30. The price will hit the bottom in the first or second quarter of 2011, and then start rebounding, the industry tracker expects.
With more suppliers using immersion scanners for their most advanced node technologies, worldwide DRAM output has grown substantially since the fourth quarter. However, demand is not expanding as fast as supply. As a result, DDR3 contract prices may fall further to US$20 by year-end 2010, down by over 30% from the third quarter.
Seeing continued price drops, several DRAM suppliers have turned cautious in their capex allocation for the first half of 2011. Samsung Electronics is likely to adjust its Line-16 fab plan to meet market conditions. Samsung in May revealed plans to build the production line for memory products with new capacity expected to come online in 2011.
Also citing a recent announcement made by Powerchip Technology, The Taiwan-based maker has decided to cut its capex by about 20% to NT$16 billion in 2011. In addition, Rexchip Electronics, Powerchip's joint venture with Japan-based Elpida Memory, plans to postpone the construction of its second plant.
However, capacity ramp-ups by major suppliers using more advanced processes will still boost the industry's total production output by 50% in 2011. Samsung will see half of its DRAM products built using a 35nm process in the second half of next year. Fellow companies Hynix Semiconductor, Micron Technology and Elpida are also set to ramp 30nm-class processes around the end of the second quarter.
With falling DRAM prices, More PC OEMs to raise the memory content for their products. The average DRAM content of a desktop and notebook will increase to 4.22GB and 4GB, respectively, in 2011.