Samsung have been reported to sell their 256 Mbit (16 Mb x 16) DDR2 graphics memory chip stock at a dangerously low price of $0.50 per unit. This situation occurs as the company is willing to unload its graphics memory stock, but it has set a price that is lower even than the competitors' manufacturing costs.

According to other competitors on the DRAM market, the production cost per chip varies around $1.40, and sells for much more than that. The DRAM manufacturing sector is already heading to the grave because of the over-saturated markets and industry leaders have attempted to straighten things up by adopting various sales policies.

DRAM is a commodity electronic product, which means that all the profits are the result of large volume shipments priced a little above the manufacturing cost per unit. On the other side, DRAM products arrive on the retail market at huge costs.

The reason Samsung is giving away the GDDR2 stock at this bargain price is quite a mystery, but this is likely to give the whole industry a punch in the face and side effects are likely to persist for a long time. Kingston has already moved to a strike in the DRAM production, because this is the only way to keep the industry afloat.

Other manufacturers have temporarily shut down their fabs to avoid the creation of huge stocks that would eventually reflect in prices falling down. Memory makers predict significant losses for the first quarter of the next year, both in DRAM and in NAND flash sectors.

"DRAM prices will likely hit a bottom sometime during the first half, and are expected to rise very sharply in the second half"' said Chu Woo-Sik, Samsung's executive vice president in charge of investor relations.