Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Memory/Storage
?
?
Memory/Storage??

Production cuts ease DRAM oversupply

Posted: 20 Sep 2011 ?? ?Print Version ?Bookmark and Share

Keywords:contract price? DRAM market? spot price?

The decline in DRAM contract price has finally eased off, according to DRAMeXchange, a research unit of TrendForce Corp. The falling price trend showed signs of stabilizing in 1HSep in which DDR3 2Gb contract price stayed flat at an average of $10.75, while DDR3 4Gb ASP fell slightly by 4.65 percent to $20.50. This resulted from DRAM makers' attempts to increase shipment volume. DDR3 2Gb chip price was about $1.13.

From the market perspective, benefiting from production cuts by manufacturers in Japan and Taiwan, the spot market continually saw price rebounds. While the increases only lasted a few short days at a time, the effects of supply-side production cuts were enough to present the depressed spot market with a chance to recover slightly. Looking at DDR3 2Gb chips, the difference between contract and spot unit price has shrunk to 12 percent. DRAM makers are all hopeful that this spot market rebound, along with demand from the upcoming peak season, will be reflected in DRAM contract price as well, finally putting an end to the poor DRAM price trend of the past few months.

Since June, DDR3 2Gb contract price has fallen by more than 40 percent to $10.50, breaking cash cost for the majority of DRAM makers. DRAM makers in Taiwan are no exception, as they are behind international manufacturers in terms of technology migration. ProMOS was the first to cut production due to financial difficulties, adjusting their wafer start capacity down to a mere 10K. Powerchip also lowered standard DRAM wafer start volume to less than 50 percent of original figures. Nanya and Inotera recently followed suit. Along with production cuts by Japanese and a portion of other international DRAM manufacturers, average wafer start volume decreased from 1H11's 1300K to about 1150K, a reduction of around 12 percent in terms of wafer start volume. From a price perspective, spot price was first to show signs of steadying. Some DRAM manufacturers have begun to quote higher spot prices. Contract price was also influenced by traditional peak season demand and the gradual decrease of inventory levels. PC OEMs' September inventory restocking has been much better than in the previous few months, causing 2Gb contract price to stay flat.

Although the market currently remains in a state of oversupply, production cuts across the board have improved the DRAM oversupply situation and eased the price decline. Additionally, many international DRAM makers are aggressively transitioning to server and mobile DRAM markets in order to seize opportunities in newer product categories such as cloud applications, smartphones and tablets. DRAM manufacturers in Taiwan, on the other hand, are leaning toward foundry and non-DRAM product orders. Consequently, standard DRAM output is expected to gradually decrease that will provide positive momentum for future DRAM price trends.





Article Comments - Production cuts ease DRAM oversupply
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top