DDR3 4GB contract prices down 6%
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The effects of the Thailand flood disaster, along with the traditional slow season for pc shipments, have resulted in DDR3 4GB prices decreasing by 6% in 1H Dec, according to research by DRAMeXchange.
The report states that average DDR3 4GB prices fell 6% to $16.5, while average DDR3 2GB prices reached $9.25, a drop of nearly 3%. The analyst adds that, although many DRAM makers have announced production cuts, the price decreases have shrunk slightly. DRAMeXchange forecasts that, as a result of these cuts, price decreases have shrunk slightly, the results of which should be seen in 1H12. However, it adds that, although the DRAM market will remain in a state of oversupply for the rest of 2011, the outlook is optimistic for 2012.
According to DRAMeXchange, the global DRAM industry was affected by the March earthquake in Japan, but DDR3 4GB price recovered to $36.5 in May. However, DDR3 4GB contract price has been on a downward trend since then, arriving at $16.5 in December – a 55% decrease. As a result, the analyst believes many DRAM manufacturers are cutting capacity or transitioning to foundry business.
TrendForce statistics note that global DRAM wafer start volume has fallen from the high of 1500K starts per month in 2008 to a forecasted low of 1000K starts per month in 2012 – a decrease of 33%. December wafer start volume is approaching the lowest volume reached during the financial crisis in 2009, 986K starts per month. Taiwanese DRAM makers have made the largest capacity cuts, from 450K starts per month in 2011 to 250K in December, a 44% decrease.
From the supply and demand perspective, after the second round of production cuts in 2H11 DRAMeXchange has adjusted its forecasted sufficiency ratio for the global DRAM industry in 1H12 down from 17% to 13%. Capactity cuts were all on commodity DRAM products. The analyst believes the severe oversupply situation is quickly improving and the industry is heading towards balanced supply and demand. The report adds that DDR3 3Gb spot price is also nearing the financial crisis period low of $0.6.
Nevertheless, although shipments are affected by the down season and Thailand floods, as the contract price downtrend has eased slightly in December, DRAM prices in 2012 may have an opportunity to recover, allowing the industry to gradually emerge from its current gloomy situation.
