DRAM, NAND memory pricing continues to drop

Stamford, Conn. — DRAM spot pricing for mainstream commodity parts continued to fall last week with average pricing across all densities and technologies down 1.6 percent compared with the previous week, reports Gartner Inc. Prices settled at $2.73 on a 1-Gb equivalent basis.

Gartner analysts report there are growing rumors that demand is starting to weaken, especially in Europe. They say it’s unclear whether it is a readjustment due to the strong growth over the past few quarters, or if consumer confidence is starting to be impacted by the increasing financial uncertainty.


Since the recent peak in price in early April, spot pricing has fallen about 30 cents for mainstream devices with pricing just above contract pricing, according to Gartner. If spot pricing continues to fall during the next couple of weeks, analysts expect that PC OEMs will use this decline to push for the first reduction in contract pricing in more than a year.

In the NAND market, spot pricing also fell again due to lower demand and overall global economic concerns, said Gartner. On a weighted 1-GB average, spot prices slipped about 5 cents to $1.49.


Vendors have been aggressively shrinking to the next process geometry in an effort to reduce the cost structure and expand margins, reported Gartner. As examples, Intel and Micron have recently announced that they are ahead of schedule in the mass production of the 25-nm 8-GB MLC monolithic chip and Samsung doubled its capital spending plans for 2010 to $15.9 billion.

With most of this increase tied to DRAM and NAND, Gartner analysts say it could signal trouble in the future as capacity materializes.

Gartner expects other competitors to raise capital spending plans as NAND margins continue to improve leading them to “abandon the recent rational behavior.” The market researcher expects this trend to slow the recovery.