Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Wednesday 27 July 2011]

Contract prices for DRAM memory declined another 9-10% in the latter part of July following about 7% decreases in the former part, according to DRAMeXchange. Prices for the entire month have fallen 15.9%, casting shadow over the industry outlook for the second half of 2011, said the price tracker.

Late July prices for 2GB and 4GB DDR3 modules averaged US$14.50 and US$28, respectively, down 9.4% and 9.7%, according to DRAMeXchange. Prices for corresponding 1Gb and 2Gb chips were US$0.75 and US$1.59, respectively.

PC clients are still placing orders quite cautiously due to continuous inventory adjustment, DRAMeXchange indicated. The transaction volume has been sluggish since June.

The PC market thus far in 2011 is not as brisk as previously expected, said DRAMeXchange, adding that some of the firms have to revise downward their shipment goals for this year. Consequently, memory content per box has grown at a slower-than-expected pace, DRAMeXchange pointed out. With no sign of improvement, these issues will continue causing DRAM prices to drop later in the third quarter despite it being a traditional peak season for the industry.

To stimulate buying sentiment, DRAM producers have offered special deals for their PC clients, DRAMeXchange said. The makers intend to sell 2GB modules bundled with 4GB for very low prices, as they are eager to clear excess inventory, the price tracker observed.

As for growth in DRAM content per PC, OEMs remain reluctant to upgrade their products to 4GB though 2Gb chips are now quoted at almost US$1, industry sources have revealed.

In addition, several memory module suppliers have cut prices for 2GB DDR3 modules to as low as US$10-11, according to the sources. The low-priced modules are being promoted in the channel, the sources said.

With chipmakers and dedicated module suppliers slashing their prices, July shipments are expected to grow 20-30% from June levels, the sources speculated. However, the pace of shipment growth is less optimistic as previously anticipated, reflecting that the actual end-market demand is weak, the sources noted.