DRAM prices begin to increase, says DRAMeXchange

Just as expected, prices of dynamic random access memory (DRAM) started to increase in the second half of July as major PC makers and OEMs began to stockpile memory to meet demand for their products during the back-to-school season. In addition to BTS, it is expected that the corporate PC replacement trend will continue in the coming quarters further driving demand for memory up.

The average contract price of a 4GB DDR3 memory module in the second half of July increased to $32, or by around 4.92 per-cent since April, May and June, which indicates that the demand for DRAM started to pick up last month, according to DRAMeXchange, a market analyst firm. At press time one 4Gb 1600MHz DDR3 chip cost $4.29, according to DRAMeXchange. The observers predict that computer memory will continue to get more expensive going forward.

Four major drivers for DRAM price are noted by the analysts:

• Back-to-school season and increased demand for personal computers;
• Corporate PC replacement because of terminated Windows XP support;
• Apple’s major product refresh (MacBooks, iPad, iPhone, iPod, etc.), which will catalyze makers of memory to reserve portions of their already constrained DRAM capacity for mobile DRAM (LPDDR3);
• Tight supply of DRAM in general.

“Given there are currently no plans from the DRAM manufacturers to expand on their existing capacity in the second half of 2014 and that many have encountered obstacles while transitioning to the 25nm manufacturing process, future supplies in the DRAM market are likely to remain tight,” the observation from DRAMeXchange reads.

The analysts do not make precise predictions at this point regarding exact prices of 4GB DDR3 memory modules and DDR3 chips. The only thing that is clear is that the prices will go up.

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KitGuru Says: Keeping in mind that all four factors that drive DRAM prices up will likely persist for several quarters down the road (the BTS will be replaced by the holiday season, which will then be followed by the Chinese New Year), do not expect DRAM to get cheaper for some time. Unless, of course, sales of PCs just collapse for some reason.

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