DRAM prices to keep falling in first half of 2011

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The price of DRAM will likely keep falling throughout the first half of next year before a recovery takes hold, according to the latest report from DRAMeXchange. The wholesale price of a 2GB DDR3 module has dropped 46 percent since the start of the year, from $46.50 to around $25 now, and it could drop to as low as $20 by the end of the year.

The trend will continue due to a combination manufacturers being able to increase output thanks to the use of immersion scanner technology that improves yields in their fabrication plants and the unusually low demand for memory. It's basic economics: an increase in supply and a low demand leads to excess supply leads and thus lower prices. That said, economics tells us that this won't last forever, since a lower price means an increase in demand to accommodate the improved yields, and eventually a relatively higher price. Thus, the market will eventually return to equilibrium.

Still, the next year is good news for PC manufacturers and consumers, and not so good news for memory makers. Falling DRAM prices normally mean PC buyers will find bargains when shopping for new computers. While prices will fall for DRAM modules sold in stores, OEMs may choose to offer better overall systems instead of lowering prices. DRAMeXchange says the market will bottom out around the first quarter of 2011, and PC makers will take advantage of the cheaper RAM prices to boost the amount of memory systems ship with. Specifically, it predicts a 36 percent increase for desktops, a 31 percent increase for laptops, and a huge 105 percent increase for netbooks.


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