DRAM contract prices fall another 10%

In late December 2010, the contract price of DRAM continued to tumble, with the price of the 2GB DDR3 module falling by 10%, the average selling price falling below $20, and the low price reaching the price of $17, compared to the DRAM shortage in the first half of 2010. In the peak period, the price of 2GB DDR3 module has fallen by more than 50% compared with the price at that time. The market expects that the oversupply situation will continue for at least another quarter, because the increase in supply in the first quarter of 2011 is quite large and is expected to reach 4 in 2011. Months later, when personal computer (PC) makers prepare for the second half of the season, DRAM prices will have the opportunity to bottom out.

The contract price for the fourth quarter of 2010 was almost all the way down. The decline was almost incomplete. It was the situation that was unanticipated by everyone at the beginning. Around April 2010, the price of 2GB capacity DDR3 module was still more than US$40. All the way down, November contract module price is still 24 to 25 US dollars, December 2GB capacity DDR3 module contract price officially fell below 20 US dollars, not even the 50% quotation in April peak.

The market expects that the quotations will fall again, in addition to the existing Elpida and Powerchip announced to reduce production, once the quote is lower than the cash cost level, it will set off another wave of production cuts.

Furthermore, under the current wave of DRAM price collapse, the financial report for the fourth quarter of 2010 will continue to suffer losses, including the South Asia Branch of Taiwan-based DRAM factories, Hua Yake, and Powerchip. Looking forward to the first quarter of 2011, If DRAM prices continue to fall, it is expected that the loss situation will expand.

In late December 2010, DRAM contract prices, including DDR2 and DDR3, continued to fall. In DDR3, the 2GB capacity DDR3 module showed no sign of falling, with a drop of up to 10%. The average selling price of a module was 17 to 18 US dollars, which was converted into 1GbDDR3 pellets and the unit price was 0.97 US dollars.

Nanyake believes that due to the end of the year, DRAM plants and system manufacturers are reluctant to leave inventory for the Chinese New Year, which is the main reason for the end of year quotation still unable to stop falling, but the original system factory will have to carry 2GB of memory capacity in the first quarter of 2011. Some models have already carried 4GB of memory in advance. It is expected that this trend will become more apparent in the first quarter of 2011, when the popularity of 4GB of memory will have the opportunity to absorb excess inventory and production capacity in the market.

Power crystal pointed out that in 2011 there will be another 1 to 2 Immersion Scanners in place to speed up the transfer to Elpida's 45nm process; Ruijing expects 100% capacity to be transferred before the end of 2010 The 45-nanometer manufacturing process, which has aggressively moved into the 40-nm process generation, is a way to resist the decline in quote prices.

In terms of DDR2, the contract price fell only about 5% in late December 2010, and the price of 2GB DDR2 module was 21 dollars, which translates into a grain price of about 1.1 to 1.2 yuan. In terms of spot prices, DDR2 prices began to show signs of falling, mainly. Recently, the market released a batch of old chipsets that were lower than the market price but only specifically supported DDR2. The first-line module makers took the opportunity to increase the price of DDR2.

On the whole, the industry believes that the trend of DRAM price decline has not been reversed until the next quarter, that is, the first quarter of 2011. In addition, there will be a lot of production capacity conversions at the beginning of 2011, which will depend on the Lunar New Year How strong is the backing up of inventory, and the environment will have to wait until at least April when the PC makers begin to stock their new models for launch in June and have the opportunity to increase inventory.