DRAM supply slowdown sends spot prices soaring

Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Friday 11 January 2013]

With DRAM makers allocating more capacity to producing chips for phones and other non-PC applications, spot prices for commodity DRAMs have soared recently, according to industry sources.

Spot prices for 2Gb DDR3 chips had stayed between US$1 and US$1.10 for a while, but recently rose beyond the range indicating a promising outlook for the industry, the sources indicated.

The price rally was a result of the efforts made by suppliers toward limiting and reducing their output for PC DRAM products, the sources believe. End-market demand has not yet picked up, however, the sources said.

Chipmakers including Samsung Electronics started to lower the production ratio for PC DRAM in mid-2012, while putting more emphasis on mobile RAM and server DRAM chips. Growth in the overall commodity DRAM output has been decelerating, the sources noted.

Data gathered by DRAMeXchange show that prices for 1333MHz 2Gb DDR3 chips rose by 5% in one day to close at US$1.15 on average yesterday (January 10). Prices during the day climbed to as high as US$1.20.

Meanwhile, spot prices for 1600MHz 2Gb DDR3 chips went up 3% to close at US$1.09-1.15 on January 10, according to DRAMeXchange.

Contract prices have rebounded since late 2012. According to DRAMeXchange, late December quotes for 4GB DDR3 modules averaged US$15.75 with prices for 2Gb chips reaching US$0.83. Prices once fell to as low as US$14 during 2012.