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DRAM, NAND prices suffer another slide

Posted: 25 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM spot price? NAND flash? market memory?

Spot pricing for DRAM and NAND flash devices slipped again, according to market research firm Gartner Inc. Average spot prices across all DRAM densities and technologies were down 3.8 percent last week compared with the previous week, settling at $1.66 on a 1Gbit equivalent basis.

But that's not the worst news. Gartner says current average pricing for DRAMs is at a 52-week low (52-week high is $3.50), which translates into pricing that is 52.5 percent below the high.

The impact on the memory market is clear with Hynix Semiconductor's announcement that it will accelerate the closure of its M7 200mm fab in Icheon, South Korea. Hynix also announced earlier in the year the closure of its 200mm Eugene, Oregon, fab in the United States by September, while it was in the process of closing two other 200mm plants. This follows announcements by Powerchip Semiconductor and Elpida Memory that they plan to reduce DRAM production from September.

At the end of 2007, Hynix had five 200mm fabs and by the end of 2008, that number will be reduced to onethe M8 facility in Cheongju-si. According to the company, the 200mm facilities accounted for 50 percent of capacity at the end of 2007, and that will be reduced to 10 percent by the start of 2009.

Gartner, however, does not expect this to affect the supply-and-demand balance for DRAM because the 200mm facilities were not producing commodity DRAM. In addition, it will take a quarter for the reductions to work though to lower supply, and by then, the industry will be in its seasonally weak Q1, said Gartner.

As for the NAND flash market, spot prices also continued to slide, despite news of a hostile bid by Samsung to acquire SanDisk and Hynix Semi's plan to accelerate the retirement of its 8-inch fabs, said Gartner.

Gartner reports that NAND spot prices were lower across all densities, with the exception of the mainstream MLC 16Gbit NAND part, which mitigated some of the overall weighted price declines. On a weighted 1GByte average, spot prices fell 1.3 percent to stand at $1.33.

While the near-term pricing outlook remains gloomy because of sluggish global demand, according to Gartner, recent NAND fab closure announcements by Hynix is hailed as good news for the industry. The retirement of the Hynix M8 and M9 NAND fabs will reduce production capacity by 40 percent by the beginning of 2009. In addition, Hynix plans to convert most of its production of DRAM and NAND flash from 200mm fabs to 300mm fabs, but through 2009, it will continue to struggle with profitability during this restructuring period, said Gartner.

- Gina Roos
EE Times Supply Network





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