As the DRAM spot market remained relatively soft since its
recent collapse, we’ve seen the overall price on standard speed memory modules
in the channel decrease -- which has in turn driven down the price of high
performance memory modules. This is good news for the consumer, but with the
increased activity of the market in the past two weeks and general consumer
demand on the uptrend we could be in for a change. Let’s take a look at what’s
been happening in the spot market.
Taiwan Based DRAM manufacturer Powerchip Semiconductor
reduced its weekly output of chips and we have seen the price climb on these
parts by over 25% in the past two weeks. Powerchip pricing for DDR2 667 MHz
parts -- which are commonly used in standard speed grade memory modules -- is
viewed by other manufacturers as a barometer for pricing and the often adjust
their prices accordingly.
The great debate among modules houses these days is whether
Powerchip is holding inventory, swapping fab capacity to higher density
parts or implementing previously scheduled new die shrinks. If there are indeed
swapping capacity then in the short term we will see a continuation of price
increases, which will soon be passed on to consumers.
As usual this is based on demand from consumers; if consumer
demand switches to the higher density 2GB modules at its current pace, look for
4GB kits to go up short term and stabilize long term as supply ramps up.
In terms of high performance memory, the story on the spot
market is Micron may start swapping capacity away from 64x8 over to higher
density 128x8 parts. If true what does this mean in the short term? You guessed
it, increased prices on 1066 MHz DDR2 -- but conversely this will also decrease the price of 2GB modules when Micron gets its full capacity online.Of course the question remains whether or not to buy
now or buy later. Traditionally any
changes in the memory spot market affect retail pricing two to three weeks
after the fact. Coupled with the major
Intel CPU price cuts coming next month, you can be sure demand for more memory
in the channel will go up this July. And we all know what happens when demand
goes up with low supply.