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As top-tier makers of dynamic random access memory continue to reduce shipments of commodity DRAM, price has become a secondary consideration for PC OEMs as their top priority is to secure their supply source. As a result, memory market tracking companies report considerably increase of DRAM pricing compared to early January.

DRAMeXchange, a division of global market research firm TrendForce, the limited supply of mainstream memory has strengthened DRAM module prices, bringing 4GB module price to $17.75 - $18 for the second half of January, a $0.50 or nearly 3% increase over the first half of January. Average 4GB price for the entire month rose by 11.11%, a rare occurrence in the past few years due to continually weak demand on the DRAM market.

At press time, one untested [eTT] 2Gb DDR3 chip cost $1.215 on average at Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $1.363/$1.3, whereas 4Gb DDR3 1600MHz memory IC was priced at $2.43 on average on the spot market. It is noteworthy that spot prices increased considerably compared to previous months.

In addition to the contract price rebound, TrendForce also notes more PC OEMs are turning to module makers to secure supply. SK Hynix and Samsung Electronics have stated they will continue to cut commodity DRAM production in the future. The third and fourth largest suppliers, Micron and Elpida, will be making product mix adjustments after their merger is complete, and Taiwanese manufacturers are gradually backing out of the DRAM industry. As a result, supply is decreasing rapidly, causing PC OEMs procurement difficulties.

PC makers are showing a desire to gradually increase inventory levels, and they are turning to module makers that they have not cooperated with as much in the past. Thus, the proportion of supply from module makers is rising, with some deals closing even higher than contract prices and approaching spot prices. The highest priced transaction was conducted at $20, a good sign DRAM manufacturers. TrendForce expects DRAM contract price to continue rising throughout the first quarter due to these supply changes.

While growing memory prices will positively affect makers’ profit margins, they will also limit the amount of memory installed into every PC. According to TrendForce research, notebook content per unit will only increase from 4.1GB to 4.7GB this year, a mere 14.7% increase and the slowest growth experienced in years.

With the simplified, optimized design of Windows 8, there is no need for significant content per unit increases. Furthermore, as BOM cost for mainstream notebooks has already fallen below S$500, there is little room for DRAM cost increases. Currently, average 4GB module contract price is $17.75, which represents 3.5% of BOM cost. If prices continue to rise, reaching the $23-$25 range, DRAM will exceed 5% of BOM cost. As a result, major PC makers may cease to boost the amount of DRAM inside their systems.

Tags: DRAM, Business, DDR2, DDR3, Samsung, SK Hynix, Micron, Elpida, Powerchip Semiconductor, Inotera, Nanya

Discussion

Comments currently: 1
Discussion started: 02/06/13 09:42:22 PM
Latest comment: 02/06/13 09:42:22 PM

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There is absolutely no shortage of DDR3 RAM. Just as with HDDs and the alleged factory damage after the Asian typhoon, if DRAM makers can drive the price higher thru collusion, they will. Hopefully they will be found to have colluded to inflate prices when there is a glut of DDR3 DRAM and the DOJ and other countries will sue them and force them to pay hundreds of millions in fines for their financial greed.

It's no surprise that the DRAM makers are trying to dupe the gullible into believing that the high frequency RAM above 2000 MHz. that you see in reviews the past few months, will actually provide a significant system performance improvement. Anyone with a clue has seen all the hype over this useless RAM that sells for a very premium price and that generates a nice profit for the DRAM companies. If you actually use real apps to test or even appropriate benches as Tom's and Anandtech have used, you will see that it is a waste of money to buy RAM above 1600 MHz. for a typical Intel or AMD desktop PC, but that won't stop the naive.
0 0 [Posted by: beenthere  | Date: 02/06/13 09:42:22 PM]
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