DRAM Prices Stabilizing

September 10th, 2007

Continued oversupply of DRAM from Asian manufacturers suggests that memory prices will remain low, according to a report released yesterday by industry research firm Dataquest.

Deflated memory prices, which hit absurd lows last year due to increased supply and decreasing demand, means more and cheaper memory in new computers. The PC industry is the largest consumer of DRAM.

For buyers of memory at the retail level, this pricing is as good as it gets, said Dataquest analyst Ron Bohn. For the PC already in the box, that pricing is contract-based pricing, and that keeps trending down as well.

There is still uncertainty on the supply side of the market, given recent reports that some Korean manufacturers are cutting back on 16MB DRAM, the report said.

The main wild card is the Korean suppliers, Bohn said. If anything, there may be a trend later this year with increasing prices for the retail buyers.

Dataquest predicts the DRAM oversupply rate will be roughly 7 percent per quarter this year. In the first half of last year, the oversupply rates ran higher than 10 percent, leading to the steep DRAM price cuts.

The big question for a person buying a [loaded] PC is, at the $2000 price point, can they get 32MB of memory in their system? That’s sort of a benchmark. Bohn said.

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