DRAM prices start to recover

The effects of reduction in capital spending will be felt by DRAM buyers next year.

By Jim Carbone -- Purchasing, 6/11/2008 1:32:00 PM

There’s good and bad new for DRAM buyers. The good news is that the average DRAM price will fall 37% for the year, according to researcher iSuppli. The bad news is that the price decline has already occurred and prices are starting to rise.

Both contract and spot market prices have increased in May, according to DRAMeXchange, a memory IC industry market researcher based in Taiwan. Contract prices increased about 5% in early May and another 2.5% in the second half of May. Spot market prices increased up to 5% in early June, depending on the density and configuration, the researcher says.

More bad news: Prices will likely rise next year because of capital expenditure (capex) cutbacks by DRAM manufacturers in 2008. Capex cutbacks by DRAM makers are severe. Hynix cut its capital spending by 44%; Micron, 31%, and Elpida, 55%, according to researcher IC Insights. Samsung’s capital spending will be flat in 2008.
Also see: Capex cutbacks could mean higher prices

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