LONDON – The second half of 2011 is shaping up to be a DRAM buyer's dream as the price for the memory component is set to go into free-fall, according to market research firm IHS.
The average selling price for the 2-Gbit DDR3 DRAM – a bellwether product – is projected to drop to $1.60 in the third quarter, down 24 percent from $2.10 in the second quarter. In 4Q11 the price could plummet another 22 percent to $1.25, close to cash costs for many manufacturers, said IHS. In the second quarter the market declined 5 percent from 1Q11.
"Contrary to typical seasonal patterns in which prices are very soft during the second quarter, that period this year saw relatively flat, unchanged DRAM pricing compared to the first quarter," said Mike Howard, principal analyst, DRAM and memory, at IHS. "The third quarter is shaping up to be pretty bloody for DRAM makers. The combination of inventory reductions by DRAM makers and more bits coming out of the fabs is resulting in a very soft pricing environment."
There could be as much as a 15.9 percent increase in shipments in the third quarter, and prices are not expected to firm up because of that, IHS said.