DRAM de-ramp
Market intelligence outfit DRAMeXchange has revealed that since mid-March, the price of branded DDR2 1Gb 667MHz increased 11.3 percent, from $1.91 to $2.16.
This was apparently due to a slowing down of production from many leading manufacturers and a consequent stocking-up by the market in anticipation of further increases in the cost of DRAM.
Furthermore, with the back-to-school season not too far away and slowing investment in DRAM manufacturing capacity, DRAMeXchange says DRAM makers expect the price to continue rising to $2.5 per Gb.
It seems that from the second half of 2006, over-expansion led to oversupply of the market and steep drops in price. The resultant heavy losses by DRAM makers has led to many of them forming alliances with each other to create efficiencies and economies of scale.
The report concludes that, with the exception of clear market-leader Samsung, any manufacturers that don’t form alliances are likely to struggle.
Samsung is also the market-leader in NAND Flash memory production, a market that is also suffering the effects of over-production with quarter-on-quarter sales declining by 15.8 percent last quarter. The average selling price of NAND Flash in Q108 fell by 35 percent compared to Q407.
You have to wonder how close the NAND Flash market is to bottoming out in the same way the DRAM market has.
