DRAM Memory Module Computer RAM Market Trends Prices Commentary

In the grand scheme of the DRAM and memory module market, there have been recent fluctuations in the market prices caused by but not limited to high demand and low production of DRAM chips followed by an over production. Memory makers show concerns over the falling prices in the DRAM industry due to a large surplus of memory amidst a slightly weakening demand for memory upgrades. In recent years computer prices have seen an unexpected increase based on the fact that DRAM prices have been at higher levels. Price fixing is another underlined cause of the computer module price increase. Close to 80 percent of DRAM chips are sold to PC vendors while only 20 percent are sold in the spot market. Several large memory manufacturers have been involved in a lawsuit over price fixing in the DRAM market sending prices soaring and passing those costs to computer vendors and consumers. Earlier this year because of the high demand and a low supply of chips where was cause for a boost in chip production triggering a post-shortage excess in unsold chips and could potentially decline prices for the rest of the year. Because DRAM accounts for nearly 20 percent of a personal computer’s cost, declining chip prices lowers the prices of PCs and signals a turn in the market. The accumulation of competition between DRAM makers should further assist in lowering prices for memory to ensure that trend holds until the end of the year. The price decrease in chips should boost the personal computers value and spark a slight shift in computer sales which in turn should help memory sales when it is time to upgrade their newer machines. Brighter spots in the market remain server modules as well as x4 components.

Folks still can care about a few things and at under $30.00 online the 2GB DDR2 SO-DIMM seems to be one of them. Online sales have been brisk on 2GB PC2-5300 and 2GB PC2-6400 SO-DIMM memory module upgrades. A reasonable investment to max out a year old notebook. Additionally, many new machines are stock at 4GB 2X 2GB new from the factory. DDR3 204-PIN SO-DIMM modules in both 2GB and 4GB  are shorter as well. In the spot market the “Kings” have always traded higher end SO-DIMM modules as they are usually short or drop faster than housing prices in Socal, yet tend to attract the better quality customers. Today there is also a bit of buzz and a few specific OEM based part number specific requirements for other DDR2 server modules. Tiger Direct does not seem to be offering unreal rebate programs pushing prices well under sub market and back door excess cost, that is a good signal as well.

Chattering is being heard around the DRAM maker water coolers about DE-COMMITTING on prices and supply to tier one computer OEMs like HP, Dell and others. With the beating the likes of Samsung, Hynix, Micron, Qimonda and Elpida have taken it seems they have perhaps pulled out the stick to draw a line in the DRAM sand in the aim of higher prices. DDR (1) is hot in the broker and spot markets, with resellers scambling to aquire 1GB Unbuffered DIMMs at prices above $30.00 for pulled, refurbished and third party modules while quotes on 1GB Unbuffered DDR2 DIMMs are $11.00 plus.It seems that finally the 64-bit Vista and hunger for larger memory has finally started to grab, to bad the DRAM guys had two years of over production.  If DRAM suppliers cut supply and claim to have no parts tier one OEMs will move to large independent stocking distributors to find supply and the market could run up.Online prices for DDR at online retailers have moved up in the past weeks. Many brokers have lost edge and or are out of the business in the past year or so, which will create less spot market speculation which will keep the cards in the hands of the DRAM makers. 

Tuesday of this week offers of 64×8 667MHz were $1.02 for Elpida (500K) and $1.07 for Nanya (50K), sizable chunks of chips considering the past week market was as hot as it has been this year. Original 1GB 667MHz UDIMMs were below $17.50. These offers surfaced in the U.S. Depression and dis pare were more abundant then true demand.

Wednesday those chip offers seem to clear up and rumors of Samsung stiffing Arrow Europe on an alleged one million dollar credit note, rebate or whatever you want to called it, based on a price protection program the two sides agreed to. Arrow allegedly continued to buy all year and in January the chip and dips hit the fan. A key Samsung European distribution manager quit as Samsung turned their back on him. It is unclear the conclusion of the story at this time, but evident that Samsung stiffed another customer and rotated another management position. Meanwhile end of the month billing on older price structures and are simply not happening. Samsung is under no pressure to move parts and is not motivated whatsoever. They showed and end of month push list that was void of 1GB 667MHz and 800MHz modules.

The month still is still hours away from being over in the U.S. and Qimonda seems to barking about raising prices as well and little has leaked in the way of anything that would be a deal from Micron.

Elpida and Hynix may as well join in with the ranks for Mira, as they can not seem to hold their water this past week. Mira parts traded at $2.02 and $1.02 in Asia last night. Hynix seems to be booking large DDR1 orders at sub market prices on finished goods such as 1GB PC2700 SODIMMs below the other CHIP OEMs. In the meantime, Elpida 64×8 667MHz seem to be less then eTT priced chips on some offers.

800MHz still a great bet…

Activity across the spot has been flat the last week for small brokers and eTT traders. Considering lack of demand prices have held in our point of view. Last night in Taiwan traders were willing to stock at $1.03 and $2.03 on 667MHz while Mira offered $1.10 and$2.20. Samsung original memory module offers have been less each day while there is healthier demand from top computer OEMs with open purchase orders for 512MB and 1GB UDIMM 800MHz. Qimonda and Samsung seem to be on the hold for any month end push while Micron has drastically raised 128×8 667MHz finished module prices.

Rumors of inside guide line prices are $20.0 and 22.0 for 667MHz and 800MHz 1GB UDIMMs at Samsung.

Monday morning update 7:45AM: Mainstream brokers and distribution were unable or not interested in filling this order.

Monday morning 12:59PM

Samsung M470T2953EZ3-CE6 (64X8 based) SODIMM 667MHz 1GB 5K pieces needed at $18.50 Target Price

Samsung M470T5663CZ3-CE6 SODIMM (128×8 based) 667MHz 2GB SODIMM 2K pieces needed at $43.00 Target price

If demand is weak, we should see these kind of prices available when the U.S. market opens.