Good news for users: flash, DRAM prices falling

Prices of the NAND flash memory and DRAM chips are falling, and its getting near time for users to pick up bargains.

It's about that time of year again when users who need IT products with heavy memory chip content should stand by for bargains. Prices of the NAND flash memory chips used to store data in gadgets ranging from digital cameras to MP3 players, as well as DRAM (dynamic RAM), which store data temporarily and play a large role in the speed of a PC, are falling.

The main reason for price declines is the time of year. The slowest time of year for IT product sales is normally between April through June, with some hangover as the summer drags on and people go on vacation. By mid-May or June, it will be a great time to pick up extra DRAM modules to help perk up a PC or even look into digital music players. Often, when memory prices decline, companies that make MP3 players add more memory to new models and slash prices on older ones.

DRAM prices on the global spot market have dropped to recent lows of around US$4.58 per chip for the most widely used 512Mb version of DDR2 (double data rate 2) in the past week, compared to US$5.45 a month ago, according to information from researcher DRAMeXchange Technology. It's been worse for NAND flash, where prices for the most widely used 2G-bit chips slid 33 percent in the first half of March.

"Moving ahead to (the second quarter), DRAMeXchange is still doubtful about any price rebound," it said in a Monday report.

Nam Hyung Kim, a memory industry analyst at iSuppli believes NAND prices have declined due to weak demand for digital music players. Brisk holiday demand late last year gave way to a short period of shelf restocking by retailers early this year, but now demand has slowed.

The slowdown prompted iSuppli to revise down its forecast for the global NAND flash memory market on Tuesday to US$13.8 billion from US$16 billion previously. Last year, the market was worth $10.8 billion.

There's plenty of other evidence for weak flash memory prices. Lexar Media Inc., a developer of NAND devices, on Tuesday updated its earnings forecast for the current quarter ending March 31 to a level far below estimates. It didn't say why it revised its guidance, but analysts reckon it's because of weak NAND flash demand.

It's new numbers miss by a wide margin. The company expects revenue for the period of up to US$130 million, with a US$30 million loss this quarter, compared to analysts estimates of US$200 million in revenue and a US$16 million loss.

"We believe weak flash demand and prices...were the primary reason for the shortfall," said investment banking firm Credit Suisse in a Tuesday research note.

It's important for users to note that the current downtrend in memory prices won't last. Demand for PCs and other IT products normally pick up later in the year, especially near back-to-school time in August or September. Market researcher Gartner believes flash memory prices will likely strengthen later in the year, while the DRAM market continues to soften -- especially since Microsoft Corp. decided to delay the launch of its new operating system, Vista.

"Impact from Vista was originally expected to be minimal: The delay will, however, affect PC shipments at the end of 2006. Some users may delay purchases until the beginning of 2007," Gartner said Monday. PCs are the largest users of DRAM chips.

The global market for DRAM chips is expected to rise to US$26.4 billion this year, from US$24.8 billion last year, according to iSuppli.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?