DRAM contract prices rise for first time this year

DRAM contract prices rose for the first time in seven months on Monday, according to DRAMeXchange.

Prices of computer memory chips, or DRAM (dynamic RAM), negotiated between computer companies and chip makers rose for the first time in seven months, indicating they may have already hit bottom for this year.

The contract price of the current mainstream 256M-bit 400MHz DDR (double data rate) DRAM chips, or DDR-400, rose to US$2.43 for chips to be delivered during the second half of May, up from US$2.40 in the first half of the month, DRAMeXchange, an online clearinghouse for the chips reported late Monday. This was the first gain since DDR-400 prices started sliding from US$4.65 last November.

Personal computer users need not worry about significantly higher prices anytime soon, though. DRAM makers continue to buy new production equipment, and output increases should keep pace with demand to maintain prices around the current level or slightly higher for months to come, analysts said.

DRAM companies continue to increase production despite the price decline. For example, Taiwan's Powerchip Semiconductor Tuesday said it raised its targeted spending on new factory equipment this year to US$1.60 billion, in order to move its production timetable up.

"DRAM prices have probably bottomed. This rise in contract prices shows PC companies may be expecting better seasonal demand, so they're willing to give some price upside," said James Huang, a chip analyst at SinoPac Securities in Taipei. However, prices probably won't rise much over the next six months due to new supply coming out from several companies that are increasing production, he said.

While contract prices for DDR-400 have risen, spot prices continued to fall. Spot market prices of 256M-bit DDR-400 chips fell to a fresh low of US$2.25 per chip late Monday, down 44 percent since the beginning of the year. Spot market prices mainly affect chips sold to non-brand PC makers, known as white-box PC makers, while contract prices apply to memory chips sold to large PC vendors.

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