Micron: DRAM Production to Remain Limited in 2013 and 2014

High DRAM Prices May Continue to Persist Throughout

by Anton Shilov
03/25/2013 | 12:00 AM

Prices of computer memory have been increasing in the recent months due to undersupplying by the the leading manufacturers. Micron Technology, the world’s third supplier of dynamic random access memory (DRAM), claims that the limited production of memory will persist throughout caledar 2013 and 2014. Do not expect cheap memory in foreseeable future, says Micron.

 

“[DRAM market] supply dynamics in particular appears to be healthy looking forward. We believe the DRAM industry wafer capacity will be down in both 2013 and 2014 and process technology upgrades are being stressed out, thereby reducing supply growth compared to historical trends,” said Mark Durcan, chief executive officer of Micron, during a conference call with financial analysts.

As Chinese manufacturers of cheap media tablets are increasing their orders of dynamic random access memory, 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% from February and whopping 46% increase from November. The contract price of 2GB DDR2 modules increased to $13.75, or by around 25% in a couple of weeks and approximately by 53% from November.

Last year oversupply on the DRAM market has resulted in a 25% price decline from 2012’s high. As a result, leading makers of memory started to cut production in a bid to be able to boost prices. Given the input from Micron, it does not look like the world’s top 3 memory supplier plans to actually boost production and therefore indirectly lower the pricing of computer memory.