2H'Sep. DDR3 contract price drops 6 percent; $1.5 for 1Gb foreseeable by year end

TAIWAN: According to DRAMeXchange, the research dept. of Trendforce, the 2H'Sep contract price continue the downward trend that DDR3 1Gb “average” price has fallen below $2 and DDR3 “average” contract price dropped 5.5 percent to $34 from $36, and even the “low” contract price has reached $33.

The 3Q10 DDR3 contract price has declined 23 percent quarterly, which is the deepest drop since mid 2009. DDR2 “average” contract price also dropped 6 percent to $33 along with the declining DDR3.

In the spot market, the Chinese government is strongly inspected on the smuggling and result in the unsatisfactory National Holiday demands due to the Asian Games at Gongzhou in November.

The spot market is quite slow. DDR3 1Gb spot average price comes to $1.82, a 20 percent decline compared with the $2.27 in the early September. Spot price will accelerate, reaching the bottom, given the weak demand in contract market.

DRAM vendors have accelerated the DDR3 migration in 2H10. 3Q10 DDR3 output growth recorded 30 percent QoQ and 15 percent in 4Q10 according to DRAMeXchange. However, the PC-OEMs are more conservative toward increasing content per box, which limited the content growth.

DRAMeXchange expects that the Oct. DDR3 2GB contract price will fall to $30 and $25 for 4Q10. DDR3 1Gb will likely fall to $1.5 by the year end.