DDR2 DRAM prices increase on record pace

Posted by Wolfgang Gruener

DDR2 memory appears to get more expensive by the hour these days. Climbing seasonal demand from motherboard and PC makers and decreased production output due to a 90 nm transition drive to the highest spot market prices in more than over a year.

Overall pricing of 512 Mb DDR2 chips closed at $6.96 on 11 September, up 16.8% from a week earlier, the analysts of DRAMExchange report. On 22 August the memory was priced at $4.90, which translates into a stunning 42% price increase within 20 days. Declining demand for DDR1 memory slowed the price increases in that segment: 512 Mb chips gained 3.5% to $6.26.

The higher price for DRAMs may not necessarily affect PC pricing, as some PC builders apparently have secured long term orders for their memory during the May and June time frame. According to DRAMExchange report OEMs are paying therefore an unchanged $43-45 for their 512MB 533MHz and 667MHz DDR2 DIMMs.

The firm believes that DDR2 price levels may be topping out soon: "DRAMeXchange doubts further growth possibility of DDR2 as our analysis model suggests that the historical pattern of price difference should fall within the range of 4% only. The probability for a price difference surpassing 10% is only 15% and this is rare in the historical price trend." As a result, a slow down and perhaps even price decreases could be arriving soon: "Since the present quote for DDR2 at spot market has rocketed to as high as $7 recently, a price correction is likely to arrive soon, though the anticipated contract price growth in 2H Sep should still lag behind spot trend," the organizations said.