DRAM contract prices have room for further growth

Spot prices for PC DRAM have risen significantly in recent days, moving further away from contract price levels. Lifted by the surge in spot prices, contract prices are set to rally through the second quarter of 2013, industry observers believe.

Spot market prices for mainstream DDR3 2Gb DRAM have come above US$1.70, while contract prices for the chips averaged US$1.08 in the second half of February, according to DRAMeXchange.

DRAM makers are shifting their focus to the mobile DRAM market, which has caused a substantial reduction in their available capacity for PC DRAM chips, the observers indicated. As a result, spot prices for commodity DRAM have been edging up since the end of 2012, the observers said.

Following in the footsteps of Samsung Electronics and SK Hynix, Taiwan-based chipmakers have moved to allocate more capacity to produce mobile DRAM chips, the observers pointed out.

Rexchip Electronics, for instance, is looking to allocate 50% of its available capacity for mobile DRAM in order to satisfy strong demand for smartphones, while Inotera Memories has also reduced its reliance on PC DRAM products, the observers said.

In other news, DRAMeXchange disclosed that DRAM contract prices for the second half of February climbed more than 10%, with 4GB modules quoted at NT$19.50-20. Prices for 2Gb chips soared 13.7% on average during the same period.