DDR2 spot prices hitting new record lows

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DDR2 spot prices hitting new record lows

Taipei (Taiwan) – Following a price rally fueled by the release of Windows Vista at the late in 2006, DDR2 memory prices are heading further south – 512 Mb devices sell for less than one quarter than in January of this year.

According to data supplied by DRAMExchange, DRAM spot prices (price quotes for immediately available DRAM chips) hit a new record low yesterday at an average price of $1.30 for 512 Mb eTT devices. The previous low was recorded on May 16 of this year, when the chips were trading for $1.35.

Current spot prices are down from more than $7 in fall of 2006 and about $5.50 in early January of this year. DRAM pricing had jumped in anticipation of the launch of Windows Vista and the increased demand for new PCs and additional memory requirements to run the new operating system. Demand cooled quickly early this year but headed into a recovery phase in June, as vendors increased their purchases to prepare for the an anticipated stronger demand for PCs in the second half of this year.

However, there apparently is little indication that this upturn will last: According to DRAMExchange, the average inventory level rose to more than a month’s worth of product. “Coupled by the gradual DRAM price decline, many manufacturers have started to clear away their excess inventory. These actions subsequently prompted prices to slide even further,” DRAMExchange said.

Further declines appear to be unlikely at this time, as current DRAM prices are about at  manufacturing cost levels, according to DRAMExchange. As a result, the research firm believes, chances for a spot price rebound have increased.

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