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DRAM pricing up; NAND flash slips

Stamford, Conn. — Spot pricing for DRAMs was up across the board last week with the biggest increases for 1-Gb DDR2 devices, according to Gartner Inc. Low-end pricing for DDR2 devices reached $2.65, which hasn’t hit this level since November 2007, according to the analyst.

Average spot pricing across all densities and technologies was up 6.3 percent compared with the previous week, standing at $2.62 on a 1-Gb equivalent basis. Current pricing is trading at 230 percent above the 52-week low, according to Gartner.

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The market researcher believes that the spot market is overheating, particularly for DDR2 pricing so as demand begins to weaken in the second half of December, there could be a price correction. As soon as market sentiment changes, traders and brokers will likely release inventory they are holding, contributing to the price correction, according to the Gartner analyst.

NAND flash spot prices slipped again for the second consecutive week to reach $2.50 on a weighted 1-GB average price. Prices were lower across all device types, with the niche 8-Gb SLC NAND part exhibiting the largest price drop of nearly 7 percent on average, as prices retreated from inflated levels, according to Gartner analysis.

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Inventory throughout the supply chain remains relatively lean, given this time of year, reports Gartner. The market researcher cites Samsung as an example, which stated that its inventory was less than one week, its OEM customers at about two weeks, and major flash card and USB drive customers at about five to six weeks of inventory.

This supports Gartner’s channel checks that supply remains constrained and inventories very lean. Gartner said while prices may dip later in November and into December, these price drops would be shallow and likely temporary.

If consumer demand is healthy for flash products for the holiday season, then it is quite conceivable that a stable pricing environment will continue into the first quarter of 2010, according to Gartner.