DRAM prices have little room to fall further, says Kingston exec

Josephine Lien,Jessie Shen, Monday 20 August 2012

Prices for DRAM memory have fallen to exceptionally low levels, giving them little room to fall further, according to Scott Chen, VP of sales for Asia Pacific at Kingston Technology. The key contributing factor to this is weakness on the demand side, said Chen.

Chen is aware that some of the major chipmakers have moved to cut back their output with an aim to lift the memory prices. However, these supply-side efforts are unlikely to contribute efficiently and effectively to future price developments as demand plays an important role, Chen indicated.

The current biggest problem is that macroeconomic conditions remain unfavorable leading to sluggish growth for the PC market, Chen pointed out. Demand coming from both the enterprise and consumer segments has been shrinking, dragging down DRAM prices. If chip prices continue their downward trend, suppliers might further scale down their production to mitigate losses, Chen said.

But there is still very limited room for DRAM to fall further, Chen believes. Demand is expected to pick up on the upcoming launch of Windows 8 tablets and ultrabook PCs later in the second half of 2012. Nonetheless, demand could turn out to be a disappointment if economic conditions in Europe and the US continue to deteriorate, Chen said.

As for NAND flash, more diverse end systems and applications allow a more optimistic attitude toward the future, according to Chen. The NAND flash market is also relatively young when compared to DRAM giving it more room to grow, said Chen.

Kingston's sales ratio between DRAM modules and NAND flash products now reaches 50:50, Chen revealed. The former product segment will shift its focus from PCs to server applications, and make a solid contribution to Kingston's overall sales growth in the future, Chen said.