DRAM prices will drop in December

DRAM MODULE MAKERS are mulling over plans to cut DRAM prices in the run up to Christmas.

The rumour mill is circulating a yarn suggesting that some in Taiwan are forecasting "a price correction to reflect seasonal demand" in December. Korean-based chipmakers are openly talking about slashing prices to boost shipments.

Normally around Christmas there is a slackening of the spot prices of DRAM and this year there is a lack of anything standing in the way of a major price cut.

The Taiwanese government has been worried about falling DRAM prices but failed to get its Taiwan Innovation Memory Company off the ground. If it had managed to do this it could have afforded to prop up DRAM prices.

There was some talk earlier this year that major DRAM producers intended to push chip prices upward. This was intended as a spoiler to keep the Taiwan government from going ahead with the TIMC project. If chip prices went up then the government would be less interested to step in.

However with that out of the way there is no need for prices to rise. Now it seems chip vendors will allow DRAM prices to follow market mechanisms.

The question now is how low will prices go. Already spot prices for 1Gb DDR2 chips fell by 1.60 per cent in one day to close at $2.45. 1Gb DDR3 also slid 0.68 per cent during the day to $2.89. µ