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As Chinese manufacturers of cheap media tablets are increasing their orders of dynamic random access memory (DRAM), whereas manufacturers are not boosting production, the prices on DRAM against considerably increased in the first half of this month, according to DRAMeXchange, a research division of TrendForce.

The average selling contract price of mainstream 4GB DDR3 modules rated to run at 1600MHz increased to $23 per unit in the first half of March, a growth of about 15%. The contract price of 2GB DDR2 modules increased to $13.75, or by around 25% in a couple of weeks.

At press time, one untested [eTT] 2Gb DDR3 chip cost $1.57 on average at Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $1.693/$1.680, whereas 4Gb DDR3 1600MHz memory IC was priced at $3.403 on average on the spot market

In a bid to cut-down manufacturing costs, numerous Chinese manufacturers of low-cost media tablets utilize commodity DDR3 memory for their products instead of special mobile DRAM, such as LPDDR2 or LPDDR3. Such customers demand 2Gb memory chips, but DRAM makers gradually phase out production of chips with such capacity, which is why the pricing of 2Gb chips is growing faster than that of 4Gb ICs.

Even though PC shipments are not expected to improve in Q2 2013, in order to replenish inventory and prepare for the upcoming peak quarters, various OEMs have shown no intention of reducing their purchase orders and seem unfazed by the increasing costs.

TrendForce predicts that there’s a chance for the 4GB DDR3 prices to reach either $27 or $28 in the foreseeable future.

In the short term, there is a possibility that DRAM prices will gradually return to the levels that they become profitable for manufacturers that use 20nm-class or better process technologies.

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

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