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DRAM Market Outlook Remains Unclear

DRAM market outlook remains unclear

DRAM prices have continued descending through August and the market is still surrounded by uncertainty for the remainder of 2011. Spot quotes for 2Gb DDR3 parts have dipped to less than US$1 with eTT chips of the same density nearing US$0.70 -- not far off from the price of 1Gb chips last month. Last month, 1Gb and 2Gb chips were set at US$0.75 and US$1.59.

The decline is largely attributed to a glut in the supply of DRAM, as memory production is said to be outpacing the growth rate of PC sales and server deployments. In addition to weak PC sales, demand for emerging applications such as tablet PCs and cloud servers is not large enough to keep up with supply growth. Although major players are taking a hit by lowering prices, it is the only way to remain relevant in the short term.

This situation is in sharp contrast to earlier developments reported when there were initial fears that the twin tragedies of the quake and tsunami would affect the production of key electronic components.

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