Expect higher DRAM prices later in the year
DRAM demand will increase later in the year, helping to drive prices up
Jim Carbone -- Purchasing, 7/2/2009 11:15:50 AM
The buyer's market for DRAMs will be coming to an end.
Rising demand, coupled with production cutbacks by DRAM makers, means supply should become tighter, resulting in upward price pressure, say Brian Matas, vice president of research at IC Insights. DRAM demand will rise in the second half because of higher seasonal demand for PCs, which consume the bulk of DRAM.
The average price of a DRAM was about $1.27 in the first quarter and then increased to $1.44 in the second quarter, says researcher IC Insights. The price will rise to $1.63 in the third quarter and then to $1.73 in the last quarter of 2009. For the entire year, the average DRAM price will be $1.54, according to the researcher. It may be small consolation for DRAM buyers, but the $1.54 average price is still lower than last year's average of $1.83 and in 2007 when it was $2.57.
Of course, the downside of lower prices is that they can result in consolidation as some suppliers leave the market voluntarily and focus on other semiconductors while others file for bankruptcy. Qimonda filed for bankruptcy in January and several other suppliers are at risk of doing the same.
Likely candidates are some of the Taiwanese DRAM companies, says Matas.
Those suppliers that survive will see DRAM business bounce back in 2010 and 2011. Underlying DRAM demand will be strong because PC demand will recover. At the same time memory content in PCs will likely rise, due in part to the switch to Microsoft's new operating system.
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