Memory pricing surges higher

Stamford, Conn. — Spot pricing for DDR2 DRAMs jumped about 20 percent compared to the previous week, and is now priced higher than DDR3 devices, according to the latest analysis from Gartner Inc. DDR3 pricing also edged up slightly last week, according to the market research company.

The 1-Gb DDR2 is now four times the price compared to pricing in mid-December 2008, when it hit its low point.

Gartner analysts say the spot market shows all the signs of overheating, and with DDR2 pricing now trading at a premium over newer DDR3 devices, the industry needs to watch carefully for a price correction. Gartner’s take on the situation: “Just as PC vendors moved aggressively to DDR3 in the middle of the year, then switched back to DDR2 when a large price premium appeared for the new technology, they will be looking to move back again to DDR3 now that parity is approaching in the contract market, and there is a significant difference in the spot market.”


Gartner analysts still anticipate increased supply from Taiwanese vendors this year as the increased wafer-ins during the past couple of months get converted to finished product.

Average spot pricing across all densities and technologies rose 15.6 percent compared to the previous week, standing at $2.47 on a 1-Gb equivalent basis.

Although Microsoft’s new operating system, Windows 7, launches this week, there is not a huge expectation in the DRAM market that it will drive significant upside demand, says Gartner. Click here for more.

Similarly, NAND flash spot prices continued rising across all densities and technologies, said Gartner. Analysts said the spot market remains constrained as NAND suppliers continue to divert products to major customers, drying up volume in the spot market. Even contract prices are not immune from rising further, as prices for the first half of October have increased as well, said Gartner.


Average flash spot pricing on a 1-GB weighted average rose 7 cents to stand at $2.62, which is a favorable pricing environment for all NAND flash vendors, especially the companies with a cost leadership position, said Gartner.