Spot pricing for DDR3 DRAMs fall, DDR2 increases

Stamford, Conn. — Spot pricing for leading-edge DDR3 devices fell last week, while the older DDR2 technology continues on an upward trend, reports Gartner Inc. The price adder for DDR3 parts has now narrowed to about 30 percent compared with the DDR2 parts, down from 65 percent a few weeks ago, according to the market researcher.

Gartner says there has been a small shift back to DDR2 devices among PC vendors, especially for low-end machines. As a result of increased demand for DDR2, in combination with shrinking supply, the average selling prices (ASPs) for DDR2 has increased. The researcher says this may tempt Taiwanese vendors to restart idle capacity to take advantage of the higher pricing.


According to Gartner, Tier 1 vendors must continue to drive down costs for DDR3 devices, so when the restarted capacity enters the supply chain in early to mid-fourth quarter 2009, DDR3 pricing can compete with the DDR2 technology with little or no price adder. Otherwise, this could delay the uptake of DDR3 technology in 2010, said the researcher.

Average spot pricing across all densities and technologies was up 4.9 percent compared with the previous week, standing at $1.61 on a 1-Gb equivalent basis. Current pricing is trading at 102.4 percent above the 52-week low and just 12.9 percent below the 52-week high.

Gartner recently published its new DRAM forecast — Forecast: DRAM Supply and Demand, Worldwide, 1Q08-4Q10 (3Q09 Update), which indicates that supply to the market is growing at 15.6 percent compared with the previous year, while the demand growth forecast has been revised up to 18.5 percent. Gartner says is the lowest demand growth in the 35 years that it has tracked the market.

Gartner believes that the industry has entered a mild undersupply period that will last through 2010.