DRAM Prices Stop Sliding Downhill

After several months of steady decline, computer memory prices (DDR, DDR2 and DDR3 memories) are now somewhat more stable and a slight increase is expected to occur over the following month. Researcher iSuppli, cited by the news site InformationWeek, just raised its rating for the whole computer memory market, saying that price cuts appear to have eased. The market researcher issued a very low rating during January, when the market went into a severe decline with about 70% price cuts by the end of that month.

Market trends appear to have changed this month, but inventory levels still remain high, with most OEM companies believed to carry at least three or four weeks of inventory. "Although iSuppli has upgraded the market rating, we remain concerned about the inventory situation in the DRAM supply channel," iSuppli analyst Nam Hyung Kim said in a statement. Even so, Kim upgraded his rating of the short-term DRAM market from "negative" to "neutral", saying that he is not ready yet to declare a full recovery of that sector. For the customers, falling memory prices meant lower total prices for consumer electronics like PCs, MP3 players and digital cameras, while putting big pressure on chip makers to find additional revenues.

Some producers are trying to improve their profits while the DRAM market is low by switching to their production towards NAND flash, the memory technology used in popular devices like Apples's iPod muic players and iPhone cell phone. iSuppli believes however that the NAND market, which has also been slow, still needs additional demand beside Apple strong selling products, in order to achieve recovery in the second half of the year. The rating for NAND market condition was raised late March to "neutral" from "negative". Kim also predicted that the chip producer's rush to the NAND memory sector will force another price decline, as demand is low and inventories high.