DRAM makers see prices rising in Q2

Samsung Electronics is experiencing yields issues on 90nm DRAM production, which should reduce the risk of continued price drops this quarter, said DRAMeXchange. As Samsung currently can only fulfill 70% of its customers' demand, the setback in shipments should help stabilize contract prices in April.

DRAM (dynamic-RAM) chip makers are forecasting higher prices for DDR2 (double data rate, second generation) memory chips over the next three months, and current events could mean they'll remain high all year.

Prices for the most widely used DDR2 modules, 512M bit chips that run at 533MHz, have rised 7.4 percent since the end of last month, according to DRAMeXchange Technology Inc.

One factor that companies mentioned as a possible downer for DRAM prices was Microsoft's delay in launching Windows Vista, which could affect PC shipments later this year. DRAM makers had expected Vista to cause PC builders to use more memory per box.

Most companies say PCs shipping later this year will be Vista-compatible, made with components and enough memory to allow them to be easily upgraded to the new OS. Strong PC sales cause DRAM prices to rise, since most of the chips end up in desktops and laptops.