Stamford, Conn. — Spot pricing for DRAMs experienced the biggest price decline last week in more than 12 months with average pricing across all densities and technologies down 5.5 percent compared with the previous week, reports Gartner Inc. Pricing fell in the double-digits for older DDR parts, while pricing for DDR3 fell about six percent, according to the market researcher.
Gartner analysts report that demand has been weak since early April, and pricing has been edging down since that time. Impacting the market are signs that show the PC market is starting to weaken, together with Samsung Electronics’ significant increase in 2010 memory capital expenditure, and other DRAM vendors that may revise their own plans upward, said analysts.
In addition, Gartner analysts report some order cancellations, although analysts aren’t sure if it is due to lower demand or a result of double ordering. Also, some PC vendors are reducing content in several models to lower their bill-of-materials.
Last week’s declines mean that spot pricing is now below contract pricing for both the DDR2 and DDR3 parts, according to Garner analysts.
Contract pricing for DDR3 increased slightly in May, while remaining stable for DDR2, said Gartner analysts. Mainstream 1-Gb DDR2 prices remained flat at $2.45, while 1-Gb DDR3 1066 MHz pricing increased 1.7 percent to $2.72. Prices started to increase at the beginning of 2009, but are now stabilizing, according to Gartner analysts.
NAND
In the NAND market, the average spot price increased slightly, led by 16-Gb and 32-Gb MLC parts, which experienced some lower prices in the legacy density parts. The stability in spot prices marks the first time in nearly two months that prices have not declined with the last average spot pricing increase above three percent in mid-October 2009, according to Gartner analysts.
Gartner analysts see new demand drivers for NAND including new media tablet PCs (including the Apple iPad), which are projected to consume about three percent of NAND demand. Increased demand will also come from hard-disk drives.
NAND contract pricing declined slightly in May: mainstream multi-level cell (MLC) 8-Gb and 16-Gb parts were down 3.5 percent and 2.5 percent, respectively. Gartner analysts expect that there will be shortages in the second half of this year, leading to price increases of at least 5 percent.
Gartner said most NAND vendors anticipate some price erosion, ranging from negative 10 percent to negative 15 percent during the second quarter of 2010, and some significant shortages in the third quarter of 2010. As a result, Gartner anticipates pricing to rise at least 5 percent from the previous quarter.
NOR flash
Contract pricing for NOR flash was mixed in May, ranging from negative 17.1 percent to 7.8 percent in May. Gartner analysts say Spansion’s emergence from Chapter 11 bankruptcy has helped stabilize average selling prices (ASPs). In addition, Macronix and Winbond Electronics increased capacity, which will increase the supply of NOR flash by the end of 2010.
Gartner maintains its forecast that ASPs will stabilize in mid-2010 and start to decline in the fourth quarter.