After several quarters of growth both in terms of volumes and prices, the market of dynamic random access memory (DRAM) may face oversupply of memory later this year, according to Samsung Electronics, the largest maker of DRAM in the world. The oversupply typically causes price drops.

Oh-Hyun Kwon, head of Samsung Electronics' chip business, said at a conference in Taipei, Taiwain, that the market was likely to enter a state of oversupply already later in Q3 2010, which mean later in September, reports DigiTimes web-site. The oversupply is conditioned by weaker than expected PC sales in several major markets as well as the fact that DRAM makers have to ramp up production using more advanced process technologies in order to produce competitive memory chips.

In the worst case scenario, if PC sales do not rebound in Europe in the fourth quarter and even Chinese New Year in February does not help, then the oversupply will continue throughout the first quarter of next year as well.

For consumer oversupplies mean lowering prices on memory products and devices that are powered by DRAM. However, since low prices weaken smaller DRAM manufacturers. As a result, once the amount of makers gets lower and/or supplies decrease, then prices begin to grow again.

Samsung is looking to volume produce DRAM products using 35nm technology later in 2010. Besides, the company plans to expand DRAM capacities next year.

Tags: Samsung, DRAM, Business