Memory Module Maker Sees No Headroom for DRAM Price Reduction

by Anton Shilov
06/16/2005 | 10:25 PM

Transcend Information, a large memory module maker from Taiwan, reportedly said in an interview that there was no headroom for further price reduction of DDR and DDR2 memory. According to the company, while some prices were continuing to drop, this was due to inventory clear-outs, not due to physical possibility to lower the costs on the side of memory makers.

Peter Shu, chairman of Transcend Information, is reported to have said that “There is no room for price reduction for DDR memory, and DRAM makers have stopped lowering their prices. DDR2 prices have bottom out as well, and the segment does not have room for more price cuts, as the NAND flash segment does,” reports DigiTimes.

Memory pricing has been declining for about a year already, which lowered gross-margins of both module and chip makers. For instance, Transcend’s gross-margin is now 11%-12%, down from the company’s traditional 15%.

At press time average spot price of 256Mb DDR2 SDRAM memory chip (533MHz) was $3.32, whereas a 512Mb device cost $5.58, according to DRAMeXchange. By contrast, average spot price of 256Mb DDR2 memory chip at 400MHz and 533MHz was $4.95 and $5.51, respectively, in mid-January, 2005. Common cost of 512Mb DDR2 device at 400MHz and 533MHz in late March, 2005, was $10.83 and $11.13, respectively. Depending on the speed and organization 256Mb DDR device costs now about $2.40, whereas earlier it cost around $2.80.