DRAM Prices Continue to Trend Downward
The already fragile DRAM market continued to lose ground in the second half of October.
DRAMeXchange said that contract prices for 4GB DDR3 memory modules fell below $16 and there is no sign of a changing trend as the $15 mark is in sight.
At the time of this writing, the DRAM market exhibited severe volatility with spot prices of 4 Gb DDR3 1600 MHz chips ranging from $2.65 to $1.75. 2 Gb chips dropped as low as $0.80, while 1 Gb versions are selling for about $0.60. It is estimated that these prices are already below production cost and DRAM makers will have to react with production cuts beyond already announced cuts.
Last month, Nanya and Inotera said they are reducing their output by about 20 percent, while Elpida and Rexchip cut their production back in August. ProMOS has entirely abandoned the DRAM business. At this time, it does not appear that DRAM makers can hope that demand for PCs will pick up significantly until the second half of 2013.
IHS recently argued that the growth opportunity may be in DRAM for smartphones and tablets instead.