Prices for DRAM and NAND Flash Chips Even Lower

According to the latest news on the web, DRAM and NAND flash chips are going down once again, reaching extremely low limits. As news site DigiTimes reports, the price for 1Gb DDR2 chips has dropped to as low as $0.70, while the NAND flash chips had their price cut by about 20 percent during the past two weeks, at least this is what sources within memory makers appear to have said.

The problem seems to be affecting upstream makers a lot, as they have already dramatically reduced output. Moreover, demand from the channel is said to have been unpredictable, which affects the makers even more. While they see increasingly losses, due to the fact that prices are unacceptably low, some or most of them are in the position to turn down orders.

According to the same sources within memory makers, not only the weak demand in the channel translates into the lowered DRAM prices, yet another reason would be the fact that there are some makers which sell their products for cash.

At the same time, the problem also aggravates as DRAM and NAND flash pricing is interdependent. This is due to the fact that DRAM and NAND flash chips share the same production capacity. As soon as one of them sees demand, the freed up capacity turns into extra supply for the other.

The situation is believed to remain unchanged for a few months at least, as there seems to be no sign that the DRAM and NAND flash could make a recovery before the end of the first quarter of 2009. As industry sources state, demand for DRAM is expected to fall even more, especially given the fact that most predictions for the next year show the overall PC shipment growth will slow down, growth only being registered in the low-cost PCs market area.