DRAM spot prices rally

Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Friday 7 December 2012]

DRAM spot market prices have seen a sustained rally for the week starting December 3, signaling that the worst could be over for commodity memory chipmakers.

Data collected by DRAMeXchange show that spot prices rose on December 6 for the fourth consecutive day. Spot prices for mainstream 2Gb chips continued to rally during the morning session today (December 7), while those for 4Gb ones also went up to US$2.05 on average, according to the price tracker.

Spot market suppliers' capacity cutbacks as well as less focus on PC DRAM products has led to the recent rebound in prices, DRAMeXchange noted.

DRAM contract prices have also shown signs of stabilization in November with less-significant falls, DRAMeXchange indicated. The firm expects prices to show only slight decreases, or even stay growth, in December.

In addition, DRAMeXchange expects industry leaders Samsung Electronics and SK Hynix to both reduce their output for PC DRAM chips in 2013, while putting more focus on providing capacity for mobile and server DRAM products. PC DRAM now accounts for less than 30% of Samsung's overall DRAM output, and the proportion is set to slip below 20% in 2013, DRAMeXchange said. Meanwhile, Hynix will lower its production ratio for commodity DRAM products to less than 40% in 2013, down from about 50% in 2012, DRAMeXchange indicated.

DRAMeXchange also believes that Micron Technology, following its Elpida Memory acquisition, is unlikely to put too much emphasis on standard DRAM used in conventional PCs. A continued reduction in global output will help the industry return to a healthier supply-demand dynamic.